Polygenta Annual Report 2013 cc1 N O T I C E NOTICE is hereby given that the Thirty-First Annual General Meeting of Members of Polygenta Technologies Limited will be held on Monday,

POLYGENTA TECHNOLOGIES LIMITED

st31 ANNUAL REPORT2012 - 2013

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BOARD OF DIRECTORS : Mr. Marc Lopresto Chairman and Wholetime Director

Mr. Subodh Maskara Director

Mr. Vinit Kumar Baid Director

Mr. Anand Dua Director

Mr. Fredrik Wijkander Nominee Director, Swedfund International AB

Mr. Sarath Naru Nominee Director, VenturEast Life Fund III

POLYGENTA TECHNOLOGIES LIMITED 2012-13

CEO : Mr. Gerard De Nazelle

COMPANY SECRETARY : Mr. Paresh Damania

BANKERS : Ratnakar Bank

Standard Chartered Bank

HDFC Bank

REGISTERED OFFICE : B-302,

Dipti Classic Premises,

Suren Road,

Andheri(E) ,

Mumbai : 400093

FACTORY : Gut No.265/2, 266,

Village Avankhed,

Taluka Dindori,

District Nashik.

Pin 422 201

Maharashtra

AUDITORS : M/s Lodha & Company

Chartered Accountants,

6, Karim Chambers,

40, Ambalal Doshi Marg,

Mumbai 400 001

CONTENTS

Particulars

Notice of Annual General Meeting

Directors Report

Auditors Report

Balance Sheet

Profit & Loss Account

Cash Flow Statement

Notes to Financial Statements

Page No.

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N O T I C E

NOTICE is hereby given that the Thirty-First Annual General Meeting of Members of Polygenta Technologies Limited thwill be held on Monday, 30 September 2013 at 3.30 p.m. at Residency Hotel, Suren Road, (Near Andheri-Kurla Road

and W.E.Highway), to transact the following business:-

Ordinary Business:-

st 1. To consider and adopt the Audited Profit & Loss account for the year ended 31 March, 2013 and the Balance Sheet as at that date together with Report of the Board of Directors and the Auditors thereon.

2. To appoint a Director in place of Mr. Subodh Maskara, who retires by rotation, and being eligible, offers himself for reappointment.

3. To appoint a Director in place of Mr. Vinit Baid, who retires by rotation, and being eligible, offers himself for reappointment.

4. To appoint Lodha & Co. as statutory auditors and fix their remuneration.

Special Business:-

5. To re-appoint Mr. Marc Lopresto as Wholetime Director and accordingly if thought fit, to pass with or without modification the following resolution as Ordinary Resolution :

“RESOLVED THAT in accordance with the approval of the Remuneration Committee and subject to the provisions of Sections 198, 269, 309, 310, 311, Schedule XIII and other applicable provisions of the Companies Act, 1956, (including any statutory modification or re-enactment thereof, for the time being in force) the consent of the Shareholders be and is hereby accorded to the appointment of Mr. Marc Lopresto as Wholetime Director of the

stCompany for a period of three years with effect from 1 September 2013.

RESOLVED FURTHER THAT consent of the Shareholders be and is hereby accorded to his receiving remuneration 24,00,000 /- per annum all inclusive including perquisites.

RESOLVED FURTHER THAT the remuneration aforesaid will be exclusive of:

(i) Contribution to Provident Fund, Superannuation Fund or Annuity Fund to the extent these either singly or put together are not taxable under the Income Tax Act, 1961.

(ii) Gratuity payable in accordance with the rules and regulations of the Company.

“RESOLVED FURTHER THAT the Board of Directors or its Committee be and is hereby authorised from time to time to amend, alter or otherwise vary the terms and conditions of the appointment of Mr. Marc Lopresto including remuneration, provided that such remuneration shall not exceed the maximum limits for payment of remuneration as may be admissible to him, within the overall limits specified by the Schedule XIII to the Companies Act, 1956”;

6. To appoint Mr. Anand Dua as Director and accordingly, to consider and accordingly if thought fit, to pass with or

without modification the following resolution as Ordinary Resolution:

th“RESOLVED THAT Mr. Anand Dua, who was appointed as an Additional Director on 16 October, 2012, and in respect of whom the Company has received notice in writing along with a deposit of 500/- from a member proposing him as a candidate for the office of director under the provisions of Section 257 of the Companies Act, 1956, and who is eligible for appointment to the office of director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.

Andheri (E), Mumbai-400 093

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7. To appoint Mr. Sarath Naru as Director and accordingly, to consider and accordingly if thought fit, to pass with or without modification the following resolution as Ordinary Resolution:

“RESOLVED THAT Mr. Sarath Naru be and is hereby appointed as a Director of the Company, liable to retire by rotation . ”

8. Increase in Authorised Share Capital

To consider and, if thought fit, to pass with or without modification(s), the following Ordinary Resolution:

"RESOLVED THAT pursuant to Section 16, 94 and other applicable provisions, if any, of the Companies Act, 1956 (including any amendment thereto or re-enactment thereof) (the "Companies Act"), the authorised share capital of the Company be and is hereby increased from 155,00,00,000 (Rupees one hundred and fifty five crores) divided into 12,50,00,000 equity shares of 10 each to and 3,00,00,000 Compulsory Convertible Preference Shares of 10 each to 190,00,00,000 (Rupees one hundred and ninety crores) divided into 12,50,00,000 Equity Shares of 10 each, 3,00,00,000 Compulsory Convertible Preference Shares of 10 each and 3,50,00,000 Class A Compulsory Convertible Preference Shares of 10/- each by the creation of 3,50,00,000 Class A Compulsory Convertible Preference Shares of 10 each and that Clause V of the Memorandum of Association of the Company be altered accordingly.”

9. Alteration of Capital Clause of the Memorandum of Association

To consider and, if thought fit, to pass with or without modification(s), the following Special Resolution:

"RESOLVED THAT pursuant to the provisions of sections 16, 94 and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) , Clause V of the Company's Memorandum of Association be and is hereby altered by substituting Clause V to read as under:

The Authorised Share Capital of the Company is 190,00,00,000 (Rupees one hundred and ninety crores only) divided into 12,50,00,000 (twelve crores fifty lakhs only) equity shares of 10 (Rupees ten only) each, 3,00,00,000 (three crores only) Compulsory Convertible Preference Shares of 10 (Rupees ten only) each and 3,50,00,000 (three crores fifty lakhs only) Class A Compulsory Convertible Preference Shares of 10 (Rupees ten only) each, with the power to increase or reduce the Capital of the Company and/or the nominal value of the shares and to divide the shares in the Capital for the time being into several classes and to attach thereto respectively such preferential, qualified or special rights, or conditions as may be determined by or in accordance with the Articles of Association of the Company for the time being in force or as may be decided by the Board of Directors or by the Company in General Meeting ,as applicable, in conformity with the provisions of the Companies Act, 1956 , and to vary, modify, enlarge or abrogate any such rights, or conditions in such manner as may be permitted by the said Act or provided by the Articles of the Company for the time being in force.

RESOLVED FURTHER THAT for the purpose of giving effect to this Resolution, the Board is hereby authorised to do all such acts, deeds, matters and things it may consider necessary, expedient, or desirable including doing all necessary filings with the Registrar of Companies.”

10. Alteration in the Articles of Association:

To consider and, if thought fit, to pass with or without modification(s), the following Special Resolution:

RESOLVED THAT pursuant to Section 31 and other applicable provisions, if any, of the Companies Act, 1956, the Articles of Association of the Company be altered by adding Article 7A after the existing Article 7:

7A. The Board may, from time to time, issue Preference Shares, whether participatory or non-participatory, carrying a preferential right to be paid dividends at a fixed amount or an amount calculated at a fixed rate, as maybe

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determined by the Board at the time of issuance from time to time. Such issue of Preference Shares, from time to time, shall be in accordance with the Act, other applicable laws, applicable Articles and other terms and conditions that may be specified at the time of issue. The Board shall have the power and authority to remove any difficulties, and do such other acts and deeds, in relation to the applicability of this Article to the rights and obligations of the holders of the Preference Shares.

By the Order of the Board of Directorsfor Polygenta Technologies Limited

Marc Lopresto Chairman

Place : MumbaithDate : 5 September 2013

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THE PROXY NEED NOT BE A MEMBER.

2. Members are requested to notify immediately any change in their addresses.

3. Shareholders desiring any information as regards the accounts are requested to write to the Company at an early date, to enable the management to keep information ready.

4. The requisite explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 is attached hereto for items of special business listed in Item Nos. 5 to 11 of the notice.

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Explanatory Statement Pursuant to Section 173 (2) of the Companies Act, 1956.

Item No. 5 Re - Appointment of Mr. Marc Lopresto as Wholetime Director

Mr. Marc Lopresto was appointed as Wholetime Director for a period of three years with effect from 20th September 2010. His term of appointment ends on 19th September 2013.

The Board of Directors at its meeting held on 30th May 2013 recommended Mr. Marc Lopresto's appointment for a further period of three years with effect from 1st September 2013.

The Remuneration Committee at the Meeting held on 30th May 2013 recommended the remuneration payable to Mr. Marc Lopresto which was accepted by the Board.

Mr. Marc Lopresto, 57 Years old, has an MBA from Wharton (Finance and Strategy specialisation), and an AB in Economics (Honours), University of California, Berkeley. He has experience in M&A, restructuring and risk advisory, and project / venture capital fund raising.

He is also a member of the following committees: Audit, Shareholder Grievance and Share Transfer, CCPS Conversion, and Share Allotment.

The Board recommends passing of this resolution.

Mr. Marc Lopresto may be deemed to be concerned or interested in this resolution. None of the other directors is interested in this resolution.

STATEMENT PURSUANT TO CLAUSE (B) PART II OF SCHEDULE XIII OF THE COMPANIES ACT, 1956

1. GENERAL INFORMATION

1 Nature of Industry

2 Date of Commencement of Business

3 Financial Performance of the Company

4 Earnings in Foreign Exchange

5 Foreign Collaborators

Manufacturer of environmentally beneficial, sustainable Drawn Texturised Yarn.

Profit / (Loss) after tax last three years : ( Lacs)Year Ending 31.03.2013 : Loss 6815.62 LacsYear Ending 31.03.2012 : Loss 4979.61 LacsYear Ending 31.03.2011 : Profit 351.64 Lacs

Last three Years : ( Lacs)Year Ending 31.03.2013 : 1314 LacsYear Ending 31.03.2012 : 3926 LacsYear Ending 31.03.2011 : 2603 Lacs

Since 2009, the Company has had a license to use a proprietary recycling technology from its promoter, PerPETual Global Technologies Limited (“PGTL”). This technology has been fully absorbed and is in use at the Nashik Plant.

th 30 September, 1994

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2. INFORMATION ABOUT THE APPOINTEE

Particulars

1 Background details

2 Past Remuneration

3 Recognition or awards

4 Job Profile

5 Remuneration proposed

6 Comparative Remuneration Profile

7 Relationship with other managerial personnel

Mr. Marc Lopresto

thHe has been working with the Company in Finance with effect from 7 January 2008 as Chief Financial Officer of the Company. Taking into consideration the contribution he has made to the Company in reconstituting and recapitalising the Company, the Board appointed him as Wholetime Director of the Company with

theffect from 20 September 2010. The appointment was confirmed by thShareholders at the AGM held on 20 September 2011. He 57 years old and has

an MBA (Finance and Strategy specialisation), AB Economics (Honours), University of California, Berkeley. He has significant experience in M&A, restructuring, risk advisory, and project / venture capital fund raising.

(Last three Years)(excluding PF & Gratuity)Year Ending 31.03.2013 : 22.48 Lacs Year Ending 31.03.2012 : 19.91 Lacs Year Ending 31.03.2011: 10.12 Lacs for part of the year in his position as Wholetime Director.

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Wholetime Director of the company in charge of the management of the company’s affai

Minimum 24,00,000 per annum

Generally persons having varied experience like Mr. Marc Lopresto draw remuneration of more than 40 lakhs per annum.

Not Related

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3. OTHER INFORMATION

PARTICULARS

1 Reasons for loss or inadequate profits

2 Steps taken or proposed to be taken for improvement

3 Expected increase in productivity and profits in

measurable terms

Because of continued weak market conditions in the standard polyester filament sector (using conventional petrochemicals as feedstock) the Company has been incurring losses. For further background please see Annexure IV of Director’s Report, Management Discussion and Analysis.

The Company made the decision to focus on manufacturing polyester filament using higher concentrations of feedstock sourced from sustainable, post-consumer PET beverage bottles (p-cPET) which has potential for higher margins. For further background please see Annexure IV of Director’s Report, Management Discussion and Analysis.

stFor the year ending 31 March 2014, the Company expects improvement from its loss of 681.6 millions for the year Ended 31 March 2013.`

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Item No. 6Appointment of Mr. Anand Dua as Director

thMr. Anand Dua has been appointed as an Additional Director effective 16 October, 2012 pursuant to Section 260 of the Companies Act, 1956 read with Article 114 of the Articles of Association of the Company and is holding office until the conclusion of the forthcoming Annual General Meeting. Mr. Anand Dua has indicated his eligibility for appointment as a Director of the company and notice has been received in writing along with a deposit of 500/- from a member proposing him as a candidate for the office of director under the provisions of Section 257 of the Companies Act, 1956.

The Directors recommend the adoption of the resolution at Item No. 7 of the Notice.

Except Mr. Anand Dua, who may be considered to be interested in the resolution to the extent of his appointment, none of the other Directors may be in any way considered to be concerned or interested in this resolution.

Pursuant to Clause 49 of the listing agreement with the Bombay Stock Exchange, the following information is furnished.

Mr. Anand Dua, 51 years old, is a practising Chartered Accountant from New Delhi having over 30 years of experience. His areas of practice include Company Law, Tax Advisory, Audit Services, Project Financing, and Investment Consulting.

He is a Director of Padmanabh Promoters Private Limited. Apart from being Director of Polygenta Technologies Limited, he is a member of the following committees of Polygenta - Audit Committee and Remuneration Committee.

He does not hold any shares of Polygenta Technologies Limited.

Item No.7 Appointment of Mr. Sarath Naru as Director

thMr. Sarath Naru has been appointed as a director by the Board effective 14 August, 2013 pursuant to Article 110A of the Articles of Association of the Company and is holding office until the conclusion of the forthcoming Annual General Meeting. VenturEast Life Fund III has nominated Mr. Naru to the office of Director retiring by rotation in accordance with the Articles of Association.

The Directors recommend the adoption of the resolution at Item No. 8 of the Notice.

Except Mr. Sarath Naru and VenturEast Life Fund III, who may be considered to be interested in the resolution to the extent of his appointment, none of the other directors/members may be in any way considered to be concerned or interested in this resolution.

Pursuant to Clause 49 of the listing agreements with the Bombay Stock Exchange, the following information is furnished.

Mr. Sarath Naru, 56 years old, is the Founder and Managing Partner of VenturEast, which has focused on venture capital/private equity in India over the last dozen ye VenturEast manages about $300 million, having made over 60 investments. At VenturEast, Mr. Naru he has helped create one of the exceptional realised track records in India, and has successfully pioneered investments in new sectors and investing approaches that other fund managers have sought to emulate.

Prior to this, he gained significant experience working for Procter & Gamble USA in the area of brand management (marketing and general management), and in manufacturing while with the British American Tobacco subsidiary VST Industries (Hyderabad). He has also built a trading business between India and the USA, covering engineering goods, fashion goods, and printing related services. His academic qualifications include, a Bachelor of Technology from the Indian Institute of Technology, Madras, and an MBA from the Booth School, University of Chicago.

He is the Director of the following companies: (1) UTI Venture Funds Management Co. Pvt. Ltd. (2)Ventureast Trust Capital (India) Private Limited (3) Ventureast Fund Advisors India Private Limited (4) Dynam Ventureast Private Limited (5) Elbit Medical Diagnostics Pvt. Ltd. (6) Equitas Housing Finance Private Limited (7) APIDC Venture Capital Private Limited (8) Sresta Natural Bioproducts Private Limited (9) Ventureast Social Investment Trustee Private Limited (10)

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Ventureast Micro-Equity Management Private Limited (11) Ascent Capital Advisors India Private Limited (12) e-Yantra Industries Private Limited (13) E2E Transportation Infrastructure Private Limited (14) Royal images and Catalogue Company Private Limited (15) Flow Edge Financial Solutions Private Limited and (16) Bharat Light Power.

He does not hold any shares of Polygenta Technologies Limited. To this date, VenturEast Life fund III also does not own any shares in Polygenta.

Item No. 8, 9, & 10Increase in Authorised Share Capital and alteration of the Articles of Association:

1. The present authorised share capital of the Company is 155,00,00,000 (Rupees One Hundred and Fifty Five crores) divided into 12,50,00,000 equity shares of 10 each and 3,00,00,000 Compulsory Convertible Preference Shares of 10 each. It is now proposed to increase the authorised share capital to 190,00,00,000 (Rupees one hundred and ninety crores) divided into 12,50,00,000 equity shares of 10 each, 3,00,00,000 compulsory convertible preference shares of 10 each, and 3,50,00,000 Class A compulsory convertible preference shares of

10 each by the creation of 3,50,00,000 Class A compulsory convertible preference shares of 10 each.

2. To increase the recycling capacity at its factory, the Company is considering setting up a ReNEW2 Plant at its Avankhed Unit with the capacity of 45MTs per day. Together with the capacity of the existing plant, the total recycling will be up to 70 MT per day. To finance the above expansion, for working capital requirements, repayment of debt, general corporate purpose and/ or such other purposes, the Company is considering the further raise of capital, whether by way of a rights issue or a preferential issue or otherwise. For the Company to raise capital, an increase in the Company's authorised share capital is likely to be required.

3. In accordance with the provision of the Companies Act, 1956 approval of the members is required to increase the authorised share capital and to make the corresponding alteration in the capital clause appearing in the Memorandum of Association of the Company.

4. Accordingly Clause V of the Memorandum of Association needs to be altered.

5. Further, to enable the issuance of Preference Shares, whether participatory or non-participatory, carrying a preferential right to be paid dividend at a fixed amount or an amount calculated at a fixed rate, as maybe determined by the Board at the time of issuance from time to time, a new provision in the articles of association of the Company is proposed to be inserted.

6. Pursuant to the provisions of Section 31 of the Companies Act 1956, any amendments in the Articles of Association of the Company require the approval of the Shareholders of the Company by way of Special Resolution. Accordingly, consent of the Shareholders by way of Special Resolution has been sought in terms of Section 31 of the Companies Act, 1956.

7. The Board of Directors accordingly recommends the resolutions for your approval.

8. None of the Directors of the Company is concerned or interested in any way in the resolution proposed to be passed at Item nos. 9, 10, and 11.

By Order of the Board of Directorsfor Polygenta Technologies Limited


Place : MumbaithDate : 5 September 2013

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DIRECTORS REPORT

To, The Members ofPolygenta Technologies Limited,

The Directors take pleasure in presenting to you the Thirty First Annual Report and Audited Accounts for the

stfinancial year ended 31 March 2013.

1. FINANCIAL RESULTS

2. OPERATIONS REVIEW

Polygenta Technologies Limited (the “Company” or “Polygenta”) has an operating license from PerPETual Global Technologies Limited (formerly known as AlphaPET Limited) (“PGTL”) for the ReNEW process (“ReNEW”), a recycling technology for recycling post-consumer PET bottles (“p-cPET”) into a high quality feedstock, which Polygenta uses to manufacturer polyester filament yarn (“PFY”). During the financial year 2012-13, Polygenta undertook and executed three primary capital projects to position it to become a leading supplier of high quality 100% recycled content yarn. These projects were:

1) Design, execution and commissioning of a reversible operating rate reduction of the continuous polymerisation unit (“CP”) at the Company's Nashik factory:

The Company successfully completed this project, reversibly reducing its continuous polymerisation plant operating rate to 20-25 metric tons per day (tpd) from 70 tpd, thereby

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matching the operating capacity of the ReNEW recycling unit at the plant. The successful completion of this project during June to August 2012 resulted in the Company manufacturing its first texturised filament yarn from 100% recycled p-cPET in August 2012.

2) Design, construction, and commissioning of Feedstock Enhancement unit (“FE Unit”):

During July-November 2012, the Company augmented its ReNEW recycling unit by adding a Feedstock Enhancement unit. The FE unit improved the composition of the recycled ester prior to its introduction into the CP and provided the added facility for transforming molten recycled ester into a form which can be stored for later use.

3) Mono-Ethylene Glycol (MEG) Recovery unit :

In February 2013, the Company commissioned a MEG Recovery unit the purpose of which was to provide for a better purification/ yield and lower cost recovery of MEG for re-use in the ReNEW unit.

The above developments mark significant progress toward the Company's goal to become a leader in manufacturing high quality PFY from p-cPET. This is a smaller speciality segment within the much larger PFY market with pricing materially higher than the more commoditised segments of the PFY market made from high purity virgin petrochemicals from crude oil.

During the financial year under review, the revenues from manufacturing operations were Rs 738.3 million. However, the Company was not able to achieve positive margins. Factors contributing to operating losses included:

• Below normal market price levels over raw material cost in the PFY market due to poor macro-economic fundamentals and recent additions of significant capacity in the Indian PFY sector.

• The Company was not operational for a considerable part of the year as it was engaged in the aforementioned capital projects to shift the Company to manufacturing 100% recycled p-cPET content yarn efficiently and sustainably.

Health, Safety and Environment (“HSE”) and Implementation of Key Process

The Nashik plant made significant progress in implementing systematically its HSE Management Systems (“HSE-MS”). The plant monitors its operations against Maharashtra Pollution Control

Year Endedst31 March 2013( in Millions)`

Year Endedst31 March 2012( in Millions)`

Revenue from Operations 738.3 1,802.2Profit/(Loss) before

Depreciation and Interest (327.1) (235.0)Depreciation 136.7 131.7Borrowing Cost 108.2 138.8Profit / (Loss) before

Exceptional Item (572.0) (505.5)Add : Exceptional Items - 7.5Profit / (Loss) before tax (572.0) (498.0)Les: Provision for current Tax - -Less: Deferred Tax Assets reversal 96.6 -Profit / (Loss) after tax (681.6) (498.0)Balance Loss b/f from previous year (500.2) (2.2)

Balance of Loss to be carried to Balance Sheet (1,181.8) (500.2)


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Board and the World Bank-IFC standards for air emissions, wastewater effluent treatment, noise pollution and the provision of an Environmental Social Management System.

ISO Certification

End-customers that prefer sustainable inputs and supply chain partners generally require their suppliers to operate at high international standards. To ensure that Polygenta fulfils its own corporate credo and is positioned favourably in manufacturing and selling sustainable PFY, it has already implemented SAP and is working to become compliant with ISO 9000 (Quality); ISO 14000 (Environment) and OHSAS 18001 (Health and Safety).

3. FINANCIAL REVIEW

• During the financial year 2012-13, the Company was granted a term loan of 100 million to finance a significant portion of the capital expenditure for the FE Unit and the MEG Recovery unit.

• The Company's External Commercial Borrowing (“ECB”) lenders continued their support of the Company's efforts to implement a breakthrough technology for the sustainable polyester textile sector by agreeing a rescheduling of the principal repayment of Euros 15 million in ECB loan principal outstanding and a deferral of select near term interest payments.

• During the financial year 2012-13, the Company has made a preferential allotment of 22,069,886 Compulsory Convertible Preference Shares (“CCPS”) of 10/- each at a premium of 33 per CCPS (total consideration 949 million). Further, during the financial year 2012-13, the Company has raised an additional amount of 179 million against which shares are yet to be allotted.

4. DIVIDEND

Due to its losses, the Company is unable to declare a dividend for the year ended March 2013.

5. EXPORTS

During the year, Polygenta earned significant export revenue from the sale of PFY and Chips amounting to 131.4 million that helped establish its commercial position in international markets.

6. PARTICULARS OF EMPLOYEES

There are no employees who draw remuneration in excess of limits prescribed under section 217 (2A) of the Companies Act, 1956, and the Companies (Particulars of Employees) Rules, 1975, as amended.

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7. DISCLOSURE OF PARTICULARS RELATING TO ENERGY, RESEARCH AND DEVELOPMENT, AND FOREIGN EXCHANGE FLOWS

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo, are given in Annexure 'I' forming part of this Report.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Subodh Maskara and Mr. Vinit Baid retire by rotation and offer themselves for reappointment.

During the year under review, Mr. Anand Dua joined as an Independent Director. Also IFCI Ltd. withdrew its nomination of Mr. Awadhesh Kumar, its Nominee Director, and he was relieved from his post as a Director on the Board of the Company.

Subsequent to the year end, Mr. Sarath Naru has thjoined as a Director with effect from 14 August 2013.

He has been nominated by VenturEast Life Fund III in accordance with the Articles of Association.

9. DIRECTORS' RESPONSIBILITY STATEMENT

The statement as required under Section 217 (2AA) of the Companies Act, 1956 is given in Annexure 'II' forming part of this Report.

10. AUDITORS

M/s Lodha & Co, Auditors of the Company retire at the forthcoming Annual General Meeting and are eligible for reappointment. Members are requested to reappoint these Auditors and to fix their remuneration.

11. FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year.

12. INSURANCE

The Company has taken adequate insurance for its assets.

13. CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements stipulated under Clause 49 of the Listing Agreement except in respect of the constitution of the Board. The Report on Corporate Governance is annexed as Annexure 'III' forming part of this Report.

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14. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchange, is annexed as Annexure 'IV' forming part of this Report.

15. INDUSTRIAL RELATIONS

Cordial industrial relations continued to prevail throughout the financial year under review.

16. MEGA-PROJECT STATUS

The Nashik project previously qualified for benefits under the State of Maharashtra mega project program subject to completing specified capital investments of at least 2,500 million in relation to the manufacture of POY and DTY at the Company's Nashik site. The Company is actively seeking a one year extension of the original March 2013 deadline to complete this investment condition. Upon fulfilling this condition, the Company will be eligible for financial benefits, including exemption from prescribed taxes and duties.

17. REPORTING REQUIRED UNDER SECTION 23(1) (a, b) of SICA Act 1985

As per the audited accounts at the end of the financial year as on March, 2013, accumulated losses amounted to 1,181.8 million. Per the criteria set out in the SICA Act, 1985, the Company has been deemed to have an erosion of peak net worth of

1,254.7 million in the preceding four financial years, which constitutes an erosion of more than 50% of peak net worth. Notwithstanding that the Company having 1,120 million in net worth and share application funds, under Section 23(1)(a) and 23(1)(b)of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, the Company is required, within a period of 60 days from the date of finalisation of the duly audited accounts of the Company for the relevant financial year, to report the fact of such erosion to the Board for Industrial & Financial Reconstruction (BIFR). Further, the Company's Board of Directors is required to report such erosion to its shareholders and the causes for such erosion at a general meeting of the shareholders of the Company specifically for this purpose.

Because of reasons set out in the Operational Review of this Report, the Company continued to incur the losses in the 2012-2013 fiscal year. The Company's adverse financial results over the last two years amounted to 1,179.6 millions (i.e. 2012-13: 681.6 Millions and 2011-12: 498.0 Millions).

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These recent operating losses have arisen from weak conditions for the Indian PFY sector, escalating year on year per unit costs of energy for electricity (18.5%) and furnace oil (13.9%), compounded by the relatively small scale of the plant, and overheads incurred during the time the plant operations were suspended to accommodate modifications and additions for manufacturing PFY from 100% post-consumer recycled PET bottles.

These production challenges are a primary reason that selling polyester filament yarn made from p-cPET as the primary feedstock has potential for higher margins. The Company is currently in the early phase of seeking to expand its recycling capacity at its Nashik plant so that it could be in a position to restore overall output of the Nashik plant's PFY product and textile chips to up to 70 MTs per day.

18. ADDITIONAL INFORMATION ON DIRECTORS RECOMMENDED FOR APPOINTMENT / REAPPOINTMENT OR SEEKING ELECTION AT THE ANNUAL GENERAL MEETING AS P R E S C R I B E D U N D E R T H E L I S T I N G AGREEMENT:

Mr. Subodh Maskara

Mr. Subodh Maskara is a Director, retiring by rotation and is eligible for re-appointment.

Mr. Subodh Maskara, aged 46 years is a Promoter of the Company and has around 22 years of experience in Polyester and Textile Industry. He has direct experience across diverse businesses such as electronics manufacturing services, telecom, publishing, oil & gas.By qualification he is MBA from J.L.Kellogg Graduate School of Management, USA

He is Director of Maskara Textiles Pvt. Ltd., Maskara Research and Development Pvt. Ltd., Maskara Filaments Pvt. Ltd. and Chhoti Production Company Pvt. Ltd.

He is also a member of the following committees of Polygenta: Shareholder Grievance and Share Transfer, Remuneration, CCPS Conversion, and Share Allotment Committee.

He holds 8.04.600 Equity Shares of Polygenta Technologies Limited.

Mr.Vinit Baid

Mr.Vinit Baid is a Director, retiring by rotation and is eligible for re-appointment. Mr. Vinit Baid, aged 39 years, has 15 years of business experience. He is a commerce graduate and an Independent Director on the Board of Dire

He is a Director of Fuji Steel Industries Limited.

ctors.


11

He is also a member of the following committees: Audit, Shareholder Grievance and Share Transfer, Remuneration, CCPS Conversion and Share Allotment Committee.

He holds 220 Equity shares of Polygenta Technologies Limited.

Mr. Anand Dua

Mr. Anand Dua has been appointed as an Additional Director effective 16th October 2012 pursuant to Section 260 of the Companies Act, 1956 read with Article 114 of the Articles of Association of the Company and holds office until the conclusion of the forthcoming Annual General Meeting.

Mr. Anand Dua, 51 years old, is a practicing Chartered Accountant from New Delhi, having over 30 years of experience. His areas of Practice include Company Law, Tax Advisory, Audit Services, Project Financing and Investment Consulting.

He is a Director of Padmanabh Promoters Private Limited.

He is also a member of the following committees: Audit and Remuneration.

Mr. Marc Lopresto

Mr. Marc Lopresto was appointed as Wholetime Director for a period of three years with effect from

th20 September 2010. His term of appointment ends on 19th September 2013.

Mr. Marc Lopresto, aged 57 Years has an MBA from Wharton (Finance and Strategy specialisation), and an AB in Economics (Honours) University of California, Berkeley. He has experience in M&A, restructuring and risk advisory, and project / venture capital fund raising.

He is also a member of the following committees: Audit, Shareholder Grievance and Share Transfer, CCPS Conversion, and Share Allotment.

Mr.Sarath Naru

Mr. Sarath Naru has been appointed as a Director thliable to retire by rotation effective 14 August, 2013

pursuant to Article 110A of the Articles of Association of the Company and holds office until the conclusion of the forthcoming Annual General Meeting. He has been nominated for appointment by VenturEast Life Fund III.

Mr. Sarath Naru, 56 years old, is the Founder and Managing Partner of VenturEast, which has focussed on venture capital/private equity in India over the last dozen years. Ventur East manages about $300 million having made over 60

investments. At Ventur East, Mr. Naru has helped create one of the exceptional realised track records in India, and has successfully pioneered investments in new sectors and investing approaches that other fund managers have found sought to emulate.

Prior to this, he gained significant experience working for Procter & Gamble USA in the area of brand management (marketing and general management), and in manufacturing while with the British American Tobacco subsidiary VST Industries (Hyderabad). He has also built a trading business between India and the USA, covering engineering goods, fashion goods, and printing related services. His academic qualifications include, a Bachelor of Technology from the Indian Institute of Technology, Madras, and an MBA from the Booth School, University of Chicago.

He is the Director of the following companies: (1) UTI Venture Funds Management Co. Pvt. Ltd. (2)Ventureast Trust Capital (India) Private Limited (3) Ventureast Fund Advisors India Private Limited (4) Dynam Ventureast Private Limited (5) Elbit Medical Diagnostics Pvt. Ltd. (6) Equitas Housing Finance Private Limited (7) APIDC Venture Capital Private Limited (8) Sresta Natural Bioproducts Private Limited (9) Ventureast Social Investment Trustee Private Limited (10)Ventureast Micro-Equity Management Private Limited (11) Ascent Capital Advisors India Private Limited (12) e-Yantra Industries Private Limited (13) E2E Transportation Infrastructure Private Limited (14) Royal images and Catalogue Company Private Limited (15) Flow Edge Financial Solutions Private Limited and (16) Bharat Light Power.

He does not hold any shares of Polygenta Technologies Limited. To this date, VenturEast Life fund III also does not own any share in Polygenta.

19. ACKNOWLEDGEMENT

The Board wishes to place on record its appreciation for the valuable co-operation extended to the Company by its employees, governmental departments, lending institutions, bankers, suppliers, and its customers for their continued considerable support.

FOR AND ON BEHALF OF THE BOARD


Place: Mumbai thDate :5 September 2013

ANNEXURE 'I' TO DIRECTORS' REPORT

ADDITIONAL INFORMATION AS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

1. CONSERVATION OF ENERGY -

(a) Energy Conservation Measures:

i) Optimisation of the process column load in place of using a fin-fan cooler. Resulting savings: 440 KWh per day;

ii) Reliance solely on the operation of ReNEW process enabled discontinuance of virgin feedstock paste feeding and paste preparation agitator. Resulting savings: 960 KWh per day;

iii) Optimisation of polymer process reducing demineralised water consumption. Resulting savings: 90 KWh per day; and

iv) Modification of yarn suction blower control circuit. Resulting savings of 3,700 per day.

Additional Investments and Proposals, to reduce energy consumption:

Installation of a step-down transformer to provide 380V power to plant lighting instead of 433 V power supply. This step is expected to reduce power consumption and increase the life of the luminaries.

Additional investment required: 6 lakhs.

(b) Total energy consumption and energy consumption per unit of Production as per Form A for disclosure of particulars with respect to the Conservation of Energy.

A. Power and Fuel Consumption

`

`

12

B. Consumption per unit of Production.

Electricity KWH / Metric Ton of Production:

2. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS ( millions):

3. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION -

The patented ReNEW™ process is a unique, cost-effective, proven chemical process that is specifically designed to accept all grades of post-consumer PET as a feedstock. It is designed to depolymerise and decontaminate post-consumer PET bottles (“p-cPET”). By breaking down this p-cPET into its chemical building blocks and filtering it in liquid form, it converts this dirty recyclate stream into a high-purity ester feedstock that is comparable to esters made from virgin petrochemical feedstocks. This “recycled ester” can then be fed into a conventional polymerisation plant, where the individual esters are 'linked together' to form a high quality polyester (i.e. PET). Compared to PET made from virgin petrochemicals, ReNEW's key advantages are:

Ø a significantly cheaper feedstock (versus the conventional petrochemicals used for PET manufacturing worldwide, i.e. PTA and MEG);

Ø low energy use;Ø a sustainable business model (using pre-existing

recycled resources rather than further depleting finite crude oil reserves);

Ø a lower carbon footprint;Ø no compromise in quality; andØ the ability to satisfy un-met customer demand for

high quality textile products made sustainably.

The ReNEW plant's unique process has been designed to make high specification, value-add products by recycling any grade of post-consumer PET bottles, including the dirtiest coloured bottles that trade at a significant discount to clear bottles due to the technology and cost limitations of other competing processes. Management refers to this

`

Year Endedst31 March

2013


2012

PET Draw Texturised Yarn 741.2 845.4PET Partially Oriented Yarn 364.7 404.78PET Polymer Chips 266.9 193.5 Washed PET Flakes 106.9 78.7

Particulars


2013


2012

Total Foreign Exchange Earned 131.4 392.7Total Foreign Exchange Used 38.0 247.1

Particulars

Year Endedst31 March 2013

( in Millions)`

Year Endedst31 March 2012

( in Millions)`

1. a) ElectricityPurchased Units (KWH) 14,038,723 23,545,636

Total Amount ( millions) 118.02 167.20

Cost per Unit ( ) 8.41 7.10

b) Own Generation Through Diesel

Generator Units (KWH ) 117,954 138,967Units per unit of fuel 3.73 3.55

Cost per Unit ( ) 13.27 12.52

2. Furnace OilConsumed Units (kilo litres) 981.6 1,649.6

Total Amount ( millions) 39.46 58.5

Cost per Unit ( per Litre) 40.20 35.48

` `

`

`

`

Particulars


ANNEXURE 'II' TO DIRECTORS' REPORTDirectors' Responsibility Statement as required under section 217(2AA) of the Companies Act, 1956 (The Act):

It is hereby confirmed:

(I) That in the preparation of the annual accounts for the year ended March 2013, the applicable accounting standards have been followed. There are no material departures from the applicable accounting standards;

(ii) That the Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit /loss of the Company for that year;

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) That the Directors have prepared the annual accounts on a going concern basis.



Place: Mumbai thDate : 5 September 2013

st31

13

competitive advantage as “enhanced bottle recovery,” an analogy to the oil and gas sector's “enhanced oil recovery” (i.e. the ability to refine more difficult, and cheaper, grades of crude oil feedstocks). Based on this technical advantage, Management expects that Polygenta's feedstock cost advantage to be at least maintained, if not improved.

a) Efforts, in brief, made towards technology absorption, adaption and innovation

The Company has an on-going R&D programme focussed on optimising the existing process and reinforcing its intellectual property protections. The main areas of development are:

• The introduction and gradual Increase in the use of coloured bottles as a feedstock;

• Improvements in the colour removal process and technologies; and

• Gradual introduction of composite PET packaging and film as alternate feedstocks.

b) Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution etc.

The benefits expected to be derived from the above efforts include cost reductions, improved product performance and consistency, greater supply chain efficiency, reliability, and flexibility. This will be achieved primarily by expanding the range of post-consumer and post-industrial (in-process) recycled PET that can be used cost-effectively as a substitute for conventional petrochemical feedstocks.

c) Technology imported during the five years preceding the beginning of the financial year:

The Company has had a license to use a proprietary recycling technology from its Promoter, PGTL, since 2009. This technology has been fully absorbed and is in use at the Company's Nashik plant.




Non ExecutiveIndependent

Attendance at the last

Mr. Subodh Maskara [1] Chairman 3 4 - 5 No

Non ExecutiveIndependent

Yes

No

Mr. Awadhesh Kumar [3] - - - - No

3 - -

Mr. Vinit Kumar Baid 1 5 - 3

No. ofCommittee membership/ chairmanships in all othercompanies

No. ofBoard Meetings attended

Name of Director(s) Category of Directorship

No. ofother direct-orships

No. ofCommittee membership /Chairmanship

Mr. Fredrik Wijkander Non Executive

NomineeDirector

Mr. Anand Dua [4]

Mr. Marc Lopersto [2] 1 4

-

-

4

7

No

YesWholetime DirectorExecutive

1

AGM

4

2

Non Executive

14

ANNEXURE 'III' TO DIRECTORS' REPORT

REPORT ON CORPORATE GOVERNANCE

(1) Company's Phi losophy on Corporate Governance Code:

The Company's philosophy on Corporate Governance is to actively pursue and achieve sustained growth, transparency, disclosure, internal

controls and internal and external communications, and high standards of accounting fidelity. The Company also complies with the listing requirements of the stock exchange where its shares are listed. The following is a report on the status and progress on major aspects of Corporate Governance.

(2) Board of Directors

The Board of Directors consists of the following members as on March 2013:st31

[1] rd

[2] Mr. Lopresto was appointed as a Chairman with effect from 3 August 2013.th

[3] Mr. Awadhesh Kumar, Nominee Director of IFCI Ltd., resigned and was relieved with effect from 12 November 2012.

[4] Mr. Anand Dua was appointed as additional director on the Board with effect from 16 October 2012.

thIn addition, Mr. Sarath Naru was appointed as Director with effect from 14 August 2013.

rd Mr. Maskara ceased to be the Chairman with effect from 3 August 2013

There were six Board meetings held during the Year thEnded March 2013. These were on 30 May 2012,

th th14 August 2012, 07th November 2012, 12 November nd th2012, 22 January 2013 and 14 February 2013. The

last Annual General Meeting (AGM) was held on 26 September 2012.

3. Audit Committee

The Audit committee consists of three Directors which includes one executive Director. The committee was set up by the Board of Directors on

nd22 April 2001. The terms of reference of the Audit Committee are as per the guidelines set out in the listing agreement that include inter alia, overseeing financial reporting processes, reviewing with the management the financial statements, accounting

st31

policies and practices, adequacy of internal control systems, adequacy of internal audit function, and discussion with internal auditors on any significant findings, financial and risk management policies. During the financial year ended March 2013, four Audit Committee Meetings were held. These were

th thheld on 30 May 2012, 14 August 2012, th th12 November 2012, and 13 February 2013.

st31

Name of Profession No. of Director meetings

attended

Mr. Vinit Kumar Baid Service 1Mr. Subodh Maskara* Industrialist 2Mr. Marc Lopresto Service 4Mr. Anand Dua** Chartered 4

Accountant in Practice


Name of Director No. of meetings attendedMr. Vinit Kumar Baid 9Mr. Subodh Maskara 9Mr. Marc Lopresto 7

15

Mr. Vinit Baid is the Chairman of the Audit Committee.

*Mr.Subodh Maskara resigned as Audit Committee member and was relieved with effect from

th16 October 2012.

**Mr. Anand Dua was appointed as Audit Committee thmember with effect from 16 October 2012.

4. Shareholder Grievance and Share Transfer Committee Meeting:

The Board constituted a “Shareholders Grievance & Share Transfer Committee” on 22 April 2001 which looks into shareholders and investors grievances and authorises Share Transfers. The Company Secretary in his capacity as 'Compliance Officer' is responsible for expediting Share Transfer formalities and solving shareholders grievances. With effect

thfrom 12 November 2012, share transfer work has been delegated entirely to M/s Universal Capital Securities Pvt. Ltd., the Registrar, and Share Transfer Agents and with the Committee overlooking the same. During the year ended 31 March 2013, twelve Committee Meetings were held. The composition and attendance of these meeting are as hereunder:

There were no complaints received during the year. The number of pending share transfer as on 31 March 2013 was nil.

5. Remuneration Committee

The Remuneration Committee was formed to review the remuneration paid to Managing / Whole time Director from time to time. During the year, the scope of the Committee was expanded to encompass advising and acting on, as required under SEBI guidelines, the implementation of an Employee Share Option Scheme (ESOP) and Employee Share Purchase Scheme (ESPS).

The Remuneration Committee consists of the following Directors:1) Mr. Subodh Maskara2) Mr. Vinit Kumar Baid3) *Mr. Anand Dua

*Mr. Anand Dua was appointed as a member of Remuneration Committee with effect from 22 January 2013.

The Remuneration Committee meeting was held on 30 May 2012 to review the remuneration of Mr. Marc Lopresto. The said meeting was attended by Mr. Subodh Maskara and Mr.Vinit Kumar Baid.

Details of remuneration paid to Mr. Marc Lopresto, Wholetime Director:-

Salary 2,248,304/- Co's Contribution to Provident Fund 144,000/-

6. Allotment Committee

On 16th March 2009, the Allotment Committee was formed to consider the allotment of Compulsory Convertible Preference Shares (“CCPS”), Optionally Fully Convertible debentures (“OFCD”) and other securities from time to time.

The Allotment Committee consists of the following Directors:

1. Mr.Subodh Maskara2. Mr. Marc Lopresto 3. Mr. Vinit Kumar Baid

A meeting of the Allotment Committee was held onrd3 July 2012 to allot CCPS on a preferential basis.

This meeting was attended by Mr. Vinit Kumar Baid, Mr. Subodh Maskara, and Mr. Marc Lopresto.

7. CCPS Conversion Committee

thOn 20 September 2010, the CCPS Conversion Committee was formed to consider the conversion / transfers of Compulsory Convertible Preference Shares (“CCPS”).

The CCPS Conversion Committee consists of the following Directors:

1. Mr. Subodh Maskara2. Mr. Marc Lopresto 3. Mr. Vinit Kumar Baid

No meetings of the CCPS Conversion Committee were held during the year under review.

`

`

April 2012 46.00 40.90May 2012 - -June 2012 43.75 43.75July 2012 - -August 2012 - -September 2012 48.15 45.90October 2012 - -November 2012 48.00 46.00December 2012 50.40 43.75January 2013 52.50 49.95February 2013 49.35 46.90March 2013 46.90 46.90

Month Bombay Stock

High Exchange

Low

Financial Year

st st1 April to 31 March (From April 2010 onwards)

Adoption of Quarterly Results for quarter ending :

June, 2013

September, 2013

December, 2013

March, 2014

Third week of August, 2013

Third week of November, 2013

Third week of February, 2014

Last week of May 2014

Annual Book Closure

th24 September 2013 to th30 September 2013

(both days inclusive)

Dividend Payment Date Not Applicable as no dividend is recommended.

8. General Body Meetings

The previous three Annual General Meeting were held as per the details given below:

No Special Resolution was put through postal ballot last year nor was proposed this year.

9. Disclosures

There are no transactions carried out during the period with any related parties, i.e. Promoters, Directors, Relatives, Subsidiaries, or Management except those stated in Note No. 31 to Balance Sheet.

The Company has complied with the requirements of the Stock Exchange, SEBI and other statutory authorities on all matters related to capital markets during the last three years. No penalties or strictures have been imposed on the Company by the said authorities. The Company has complied with all of the mandatory requirements of Clause 49 of the Listing Agreement. However, the composition of the Board of Directors is not in accordance with Clause 49. The Company is undertaking a search to appoint an independent director to comply with the composition of the Board of Directors. The Company is in the process of adopting the non-mandatory requirements of Clause 49 in due course.

10. Means of Communication

The quarterly results are published in The Asian Age (English Newspaper) and Mahanayak (Marathi Newspapers).

16

11. General Shareholder Information

A. The Annual General Meeting – Day, Date, Time and Venue

B. Financial Calendar

C. Listing on Stock Exchanges:

The Equity Shares of the Company are listed on the Bombay Stock Exchange Ltd., Stock Code: 514486The Company has paid the annual listing fees for the year 2012-13 to the said exchange.

D. Market Price Data:

The following were the high and low prices for the Company's equity shares during the last financial year. The Company's shares were not traded on the Stock Exchange on a daily basis. Hence the high and low prices of the shares are given as and when the shares were traded.

st31

Year Day Date Time Venue

2010 Friday 9.07.

201011:00a.m

128, Jolly Chambers II, Nariman Point,Mumbai - 400021

Maker

2011 Tuesday 20.09.2011

03:00 B-302, Dipti Classic Premises, Suren Road,Andheri(E), Mumbai : 400093

p.m

2012 Wednesday 26.09.2012

11:00 B-302, Dipti Classic Premises, Suren Road,Andheri(E), Mumbai : 400093

a.m

Venue

Residency Hotel, Suren Road, Andheri (E), Mumbai-400 093

Day Date Time

30thSept.2013

3.30 p.m.

Monday


Category No. of Shares %Promoters 91,912,464 74.94%Banks, Financial Institutions 3,146,594 2.57%Bodies Corporate 146,701 0.12%NRIs/OCBs 19,309,361 15.74%Trust 8,025,000 6.54% Public 115,645 0.09% Total 122,655,765 100.00%

17

During the year the BSE Sensex increased by 6.7%, whereas the Company's price increased by 11.8%.

E. Registrar and Share Transfer Agents:

The name and address of the Company's Share Transfer Agents is as under:

M/s Universal Capital Securities Pvt. Ltd.(Formerly Mondkar Computers Pvt. Ltd.)

21, Shakil Niwas, Opp. Satya Saibaba Temple, Mahakali Caves Road,Andheri (E), Mumbai, 400 093 Phone No.: 28207203 / 28257641 Telefax: 2820 7207

F. Share Transfer system:

With a view to expedite the process of share transfers, the Board of Directors has delegated the

power of share transfer to the Share Transfer Agents. Shares for transfer are processed expeditiously within fifteen days in the case of physical transfers.

G. Dematerialisation of Shares:

The Company has entered into a contract with CDSL and NSDL.

As on 31 March 2013, 78.16 % of the Company's shares were held in Dematerialized form.

H. Shareholding Pattern as on March 2013st31

I. Distribution of Shareholding as on March 2013st31

Number % of Total Holdings % Total % Total

2 3 4 5 6 7

( )`

1

Share Holding Share Holders Share Holdings Share Amount

Liquidity of Shares: The Equity Shares of the Company are included under T category at the Bombay Stock Exchange, Mumbai.

Upto 500 1,102 96.077 37,261 0.030 372,610 0.030501 - 1,000 15 1.308 12,043 0.010 120,430 0.0101,001 - 2,000 8 0.697 12,657 0.010 126,570 0.0102,001 - 3,000 1 0.087 2,510 0.002 25,100 0.0023,001 - 4,000 2 0.174 7,250 0.006 72,500 0.0064,001 - 5,000 1 0.087 4,900 0.004 49,000 0.0045,001 - 10,000 1 0.087 7,250 0.006 72,500 0.00610,001 and above 17 1.483 122,571,894 99.932 1,225,718,940 99.932

TOTAL 1,147 100.000 122,655,765 100.000 1,226,557,650 100.000

J. Plant locations:

Gate No. 265/2,266, Village – Avankhed, Taluka, Dindori District, Nashik, 422 201.

K. Address for Correspondence:

The Shareholders may address their communications / suggestions / grievances / queries to:

Company Secretary POLYGENTA TECHNOLOGIES LIMITEDB-302, Dipti Classic Premises, Suren Road, Andheri (E), Mumbai,400 093.

OR The Registrar and Transfer Agents M/s Universal Capital Securities Pvt. Ltd.

(Formerly M/s. Mondkar Computer Services Private Limited)25, Shakil Niwas, Opp. Satya Saibaba TempleMahakali Caves Road, Andheri (East), Mumbai 400 093.




( )`

18

12. Auditors Report on Corporate Governance:

To,The Board of Directors,Polygenta Technologies Limited

We have examined the compliance of conditions of Corporate Governance by Polygenta Technologies Limited (“the Company”), for the year on March 31, 2013, as stipulated in clause 49 of the Listing Agreement of the said Company with the stock exchanges of India.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and based on the representations given by the management of the Company, we certify that the Company has complied in all material respects with the conditions of Corporate Governance, except for non-compliance of clause 49-I (A) regarding the required number of independent director in the composition of Board of the directors of the Company, as stipulated in the Listing Agreement;

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For LODHA & CO. Chartered Accountants Firm Registration No: 301051E

A. M. HariharanPartnerMembership No. 38323

Place: Mumbaist Date: 31 May 2013


19

ANNEXURE ‘IV’ TO DIRECTORS REPORTMANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Structure and Development, Opportunities and Threats:

Polygenta Technologies Limited (“Polygenta” or the “Company”) was incorporated in 1981. Over the years, it has come to focus on the business of manufacturing and selling polyester filament yarn (PFY). The Company’s strategic objective is to become a leading manufacturer of high quality, sustainable (environment-friendly) Polyester Filament Yarn (“PFY”) using post-consumer PET bottles (also a polyester) as its primary feedstock.

Polygenta has acquired from PerPETual Global Technologies Limited (“PGTL”) a license for the ReNEW process, a PET recycling technology, which produces a sustainable feedstock (a “recycled ester”) which can be further processed to manufacture polyester products. Of the various polyester products/ sectors (i.e. PET Bottles, food packaging, PET film, and textiles) Polygenta is focused solely on polyester textiles, particularly making PFY and chips sold to third parties to make polyester textile products complimentary to the Company’s commercial interests. PFY products are used for various applications including apparel, denim, home furnishings, f loor coverings, and industrial applications. Management believes that Polygenta is well-positioned to play a leading role in a specialist segment of the broader more commoditised PFY market – namely the market segment for sustainable PFY made from 100% post-consumer PET bottles (“p-cPET”). This segment is somewhat more insulated from the more commoditised, price-driven dynamics of the broader polyester textile market.

Polygenta currently operates from a single plant near Nashik in the state of Maharashtra in India. The plant is 100% integrated from feedstock through to the manufacturing of PFY. The plant is designed such that it can use as feedstocks high purity, virgin petrochemicals and/or p-cPET. The feedstock used is transformed into a molten polyester polymer, spun into a raw yarn (“POY”) which in turn is Texturised to make a finished drawn texturised yarn (“DTY”) which Polygenta customers use to knit or weave into fabric for garments, etc.

Presently, the plant is operating at a capacity of 22-25 tpd with 100% of its primary feedstock derived from p-cPET.

During the last financial year, Polygenta undertook to establish itself as a supplier of high quality 100% recycled content PFY in selected product segments with customers interested in buying DTY made using 100% p-

cPET feedstock. Over the next year, the Company’s objectives are concentrated on building its customer base, reputation for quality and consistency, sales volume, and operating margins. In parallel, the Company will be seeking to broaden its feedstock supply network and develop process innovations which over time might enable it to use a broader range of PET feedstocks. This would in turn further enhance the sustainability of its product offerings, the appeal of the same to its target customer segments, and, in tandem, the Company’s profitability, and generation of shareholder wealth.

Management believes these initiatives will enable Polygenta to take advantage of present and growing trends by leading global apparel, footwear and furnishing and industrial brands to increase the sustainability of the polyester textile sector. These trends include the following:

• As vital as polyester is to meet global textile demand (as the leading fibre of choice), the fact that polyester is not bio-degradable poses a serious challenge to the apparel, footwear, home furnishing, and other textile sectors overall as increasingly manufacturers / retail brands are being asked to take responsibility for products at the end of their useful lives;

• The decreasing availability and increasing costs of landfill and /or incineration as viable options for disposal of process waste or end-of-life products;

• Government initiatives seeking to require the industry to provide further retail product labelling indicating and quantifying the environmental impact of manufacturing the product (e.g. aspects such as carbon footprint, waste, water consumption, chemical use); and

• Increasing consumer demand products (without compromising quality) that are made sustainably, in particular maximising the degree to which feedstocks can be from recycled and/ or renewable sources that benefit the environment.

To help ensure a successful pursuit of this strategy, Polygenta is committed to the being an enterprise which excels in innovation, sustainability, and empowerment, building mutually rewarding partnerships with all of its stakeholders.

Operating Results and Financial Performance:

During the financial year 2012-13, Polygenta undertook and executed capital projects with the objective of becoming a leading supplier of high quality 100% recycled content yarn. Since first successfully

20

manufacturing 100% recycled yarn in August 2012, the Company has been improving and optimising production processes with further improvements while working through the demanding sales cycle and evaluation phases of various well-known brands in the sports, apparel, home furnishings, and footwear segments.

During the last financial year 2012-13, revenues from manufacturing operations were ` 738.3 million. However, the Company was not able to achieve positive margins. Factors contributing to operating losses included:

• Below normal market product price levels (vis a vis raw material cost) in the conventional PFY market due to poor macro-economic fundamentals and recent additions of significant capacity in the Indian PFY sector;

• Significant increases in per unit power and furnace oil costs;

• The Company was not operational for a considerable part of the year when it was engaged in key phases of completion of various capital projects for improving the efficiencies; and

• Above average net consumption of MEG in the chemical recycling of p-cPET bottles during the start up and stabilisation phase during the year. Generally this MEG is recovered, decontaminated, and re-used. However, in the start-up phases, a higher amount of used-MEG was sold to 3rd parties for re-generation at a lower value than the market value new MEG, accordingly generating a cost. To address this, the Company set up MEG Recovery unit which commenced operations only in February 2013. The Company has witnessed a signification improvement in operations and cost post the commencement of operations of these columns.

Accordingly, sales of goods from the regular manufacturing operations resulted in cash losses of

st ` 435.3 million during the financial year ended 31 March 2013. As of the end of the fiscal year, your Company’s net worth totalled 1019.5 million.

As previously reported, in 2009 the Company procured External Commercial Borrowing (ECB) loans in the amount of Euro 15 Million (equivalent to Rs 1043.3 million

stas on 31 March 2013). The ECB lenders demonstrated their continued support and agreed to defer selected interest payments and a re-scheduling of repayment of the principal loan. To further support ramping-up sales, the Company has approached its ECB lenders again to further extend debt service obligations. At this point in time, the terms are still under discussion and no statement can be made as to if and when such a further

restructuring might be completed. As of March 2013, the Company has provided for interest of 194.13 million (equivalent to Euros 2.79 Million) on its ECB loans.

During the year, Ratnakar Bank sanctioned a ` 100 million term loan to finance a significant portion of the Feedstock Enhancement unit and MEG Recovery unit. This facility is secured by exclusive charge on these assets.

As of March 2013, the investment in Company gross fixed assets was ` 2,858.3 million with an additional 12.60 million in Capital Work-in-Progress.

Industry Outlook

PET Market

Polyethylene Terephthalate (polyester or PET) is one of the most versatile and widely used plastics in the world. Many everyday products like food containers, synthetic fibres and almost all plastic bottles are made from PET. PET is manufactured by reacting an acid and an alcohol (glycol) together, resulting in an ester, and feeding these esters into a polymerisation vessel that links them in a chain, thereby creating a ‘poly-ester’. Currently, most manufacturers of PET products rely primarily on “virgin” petrochemical feedstocks refined from crude oil: Purified Terephthalic Acid (PTA) and Mono-ethylene Glycol (MEG).

Approximately 65 million tonnes of PET are estimated to have been produced globally in 2012. This tonnage has grown at a compound annual growth rate of 7.25% over the last 20 It is estimated that approximately 19 million tonnes were for bottle-grade PET applications, primarily for beverages and packaging. (Note: It is estimated that roughly 600 billion PET bottles were sold in 2011. The largest single sectoral use of PET is for high quality filament yarn with estimated production of about 27 million tonnes in 2012. Approximately 14.5 million tonnes of PET were produced for the polyester staple fibre sector, about 2.7 million tonnes were for the PET film sector, and the remainder PET production was for other PET applications. A CAGR of 7.1% from 2011 to 2016 in PET bottles alone is expected to continue, driven primarily by increasing population and consumer demand in emerging markets.)

In 2011, approximately 47% or about 7.3 million tonnes of the world’s bottle-grade PET production was collected for reprocessing, with the remainder incinerated or disposed of at landfill sites. Most of this recycled post-consumer PET bottles (“p-cPET”) is made into low-grade products using inefficient mechanical recycling processes. The low-grade of these products results from technical

st31

st31

`

years.


21

processing limitations, residual impurities, feedstock inconsistency, and molecular deformities inherently related to these mechanical processes.

This largest single end-product for p-cPET is for fibre-fill, staple fibre and packaging straps, rather than higher-grade applications (e.g. polyester filament yarn such as that made by the Company, food-grade bottles, and rigid packaging materials).These high-end application segments, such as filament yarn, are more demanding – for example where issues such as dye uptake (for colour consistency) and tenacity (for strength) are important. For this reason, there is little p-cPET used for such applications and this is where generally product prices are materially higher than for a comparable yarn made from virgin petrochemicals. Presently, the Company’s ReNEW recycling plant at Nashik processes 20 million bottles monthly, or less than 1% of the global collection. As it focuses on manufacturing polyester filament yarn using 100% p-cPET as its feedstock, the Company will be seeking to establish itself as a significant player in this specialty segment within the broader Indian polyester textile sector - one of India’s largest industrial sectors and an important foreign exchange earner.

Polyester texturised yarn (the Company’s product) is used directly by manufacturers to produce fabric which is in turn made into garments, home textiles, industrial applications and other products for the domestic market and export. For various applications, texturised yarn is considered generally to be more cost competitive than yarn made from polyester staple fibre (“PSF”) as production of the latter is more energy intensive. Sector-wide, the PFY sector is projected to grow at a CAGR of approximately 7%. The key drivers for this growth include:

• improved competitiveness internationally as more of China’s production is consumed domestically;

• the strength of growth in the domestic market driven both by population growth and increases in disposable income; and

• relative competitiveness versus other natural and man-made fibres.

Unlike mechanical recyclers, the ReNEW process, as a result of its lower costs and ability to create a product that is chemically equivalent to virgin petro-chemical feedstock, is able to offer conventional virgin PET manufacturers a second source of feedstock supply and a sustainable equivalent to virgin PTA and MEG, which does not alter the quality, nor quality consistency, of their end-products.

Management believes that the sustainable polyester filament yarn segment that Polygenta is targeting will

grow at a materially faster rate than the overall PFY market. Many leading global apparel and home textile brands are publicly adopting challenging targets in 3-5 year time frames to manufacture a much larger percentage of their product line from environmentally compatible sources and suppliers. Management believes that demand for these products significantly exceeds supply and that this imbalance will continue for the foreseeable future.

Risks and Concerns:

While there is a bright outlook for the polyester sector generally and the specialty segments of interest to Polygenta, the Company is cognizant that, inherent particularly in a sector such as polyester, one needs to be vigilant in identifying and actively and prudently managing risk inherent to the business.

Generally the Company categorises its risks in terms of market risk (including feedstock and product pricing, interest rate and foreign currency fluctuations), credit risk, infrastructure risk (hardware, software and IT) and operating risks (including but not limited to health, safety, and environmental risks).

The Company is seeking to manage its overall exposure to product, feedstock, and margin fluctuations through a number of steps: including diversifying suppliers, careful negotiation of supply contract terms and matching of contract sales as feasible and seeking benefits when possible from the use of substitute feedstocks.

Similarly, the Company intends to pursue actively export markets for its products first and foremost because of the excellent opportunities that the Management believes those market hold, but also because these provide a natural hard-currency hedge for its foreign currency denominated term debt obligations.

Management is also cognizant that its personnel are the core asset of the Company and that competition for talented personnel will only intensify in the future. To help ensure full develop and optimal retention of its this valuable asset, Management is committed to is investing in its development and providing through an exceptional work environment and training opportunities coupled with competitive and innovative compensation and incentive schemes.

Segment –wise Performance:

All products relate to textile application and hence segmental reporting is not applicable.

Internal Control Systems and their Adequacy:

The Company is constantly enhancing its internal control systems commensurate with the size and nature of its business.

To facilitate timely tactical and strategic business decisions through faster assimilation of information, your Company has implemented world-class integrated application software systems (SAP) for on-line Transaction Processing. This has contributed significantly to seamless transaction processing, MIS and Internal Controls and Procedures.

The Company has appointed a specialist internal audit firm M/S DDA Consulting, which submits its quarterly report to the Audit Committee, which in-turn reports to Board of Directors.

The Internal Auditor provides reasonable assurance to the Board of Directors that the risk exposures it faces are understood and managed appropriately in dynamically changing contexts. The Company’s internal audit focuses on Management / Operational Audit through transaction validation on value additions, systems improvement, and statutory compliances.

Human Resource Development and Research Activities:

The Management strongly feels that the Company’s core strength lies in its human resources. Training and development of human resources is an ongoing priority for the Company as it seeks to become a leading innovator in its sector and perform at a very high standard in all aspects of its business and operations, particularly in a rapidly changing external environment. In pursuit of such high standards the Company is currently actively engaged in the development and adoption of work practices and procedures so that the Company can achieve certification under ISO 9000 (Quality), ISO 14000 (Environment) and OHSAS 18001 (Health and Safety).




22

-------------------------------------------------------------------------The Management of Polygenta Technologies Limited has prepared and is responsible for the financial statements that appear in this Report. These are in conformity with accounting principles generally accepted in India.

The Management also accepts responsibility for the preparation of other financial information that is included in this Report. Statements in the Annexure IV Management Discussion and Analysis section describing the Company's progress, status, objectives, projections, estimates, and expectations may be 'forward looking statements' within the meaning of applicable laws and regulations. The Management has made these statements based on its current expectations and projections about future events. Wherever possible, it has tried to identify such statements by using words such as 'anticipate', 'estimate', 'expect', 'project', 'intend', 'plan', 'believe' and words of similar substance. Such statements, however, involve known and unknown risks, significant changes in commercial market conditions, the political and economic environment in India and elsewhere, tax laws, litigation, labour relations, exchange rate fluctuations, interest expense, and other costs, which may cause actual results to differ materially. The management cannot guarantee that these forward-looking statements will be realised, although it believes that it has been prudent in making these assumptions. The Management undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.-------------------------------------------------------------------------


INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OFPOLYGENTA TECHNOLOGIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of POLYGENTA TECHNOLOGIES LIMITED (“the Company”), which comprise the Balance Sheet as at

st31 March , 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the

23

circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of staffairs of the Company as at 31 March, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date, and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

LODHA & COChartered Accountants

6, Karim Chambers,40, Ambalal Doshi Marg,Mumbai - 400001

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

(e) On the basis of the written representations received from the directors as on March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on

March, 2013 from being appointed as a

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st31

24

director in terms of clause (g) of sub-section (1) of section 274 of the Act.

For LODHA & CO.Chartered AccountantsFirm Registration No: 301051E

PartnerMembership No.

A. M. Hariharan

38323

Place: MumbaiDate: st31 May 2013

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING “REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE POLYGENTA TECHNOLOGIES LIMITED

1. (a) The Company has maintained proper records s h o w i n g f u l l p a r t i c u l a r s , i n c l u d i n g quantitative details and situation of fixed assets.

(b) As explained, the assets have been physically verified by the management in accordance with the phased programme designed to cover all the assets over two years. In our opinion, the frequency of verification is reasonable considering the size of the Company and nature of its fixed assets. As informed, no major discrepancies were noticed on such verification.

(c) No substantial/major part of fixed assets has been disposed off by the Company during the year.

2. (a) The inventories have been physically verified by the management at reasonable intervals during the year.

(b) The procedures of physical verification of

inventories followed by the management are adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. During the year, discrepancies noticed on physical verification of stocks as compared to book records were not material and has been appropriately dealt with.

3. The Company has not taken/granted any loans, secured or unsecured, from/to Companies, Firms and other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items of fixed assets and inventories purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in their internal control system.

5. (a) During the year, the Company has not entered into a contract that needs to be entered in the register maintained under Section 301 of the Act.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to 5,00,000 or more in respect of each party, have

been made at the prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and other relevant provisions of the Act and rules framed thereunder.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records

maintained by the Company, pursuant to the Order of the Central Government under Section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made

`


and maintained. We are, however, not required to make a detailed examination of such records with a view to determine whether they are accurate or complete.

9. (a) During the year, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other statutory dues with the appropriate authorities except certain delays in payment of income tax and service tax. There are no statutory dues

stoutstanding for more than six months as on 31 March, 2013 from the date they became payable.

b) According to the records of the Company, there are no dues in respect of Sales Tax/ Income Tax/ Custom Duty/ Wealth Tax/ Service Tax/Excise Duty/ cess which have not been deposited on account of any dispute except the following:

10. The Company has accumulated losses exceeding by more than fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or banks.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As the Company is not a nidhi/ mutual benefit fund/ society, the provisions of clause 4(xiii) of the Order is not applicable to the company.

25

14. As the Company is not dealing or trading in shares, securities, debentures and other investments the provisions of clause 4(xiv) of the Order is not applicable to the company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. According to the information and explanations given to us, term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of cash flow statements and balance sheets of the Company, in our opinion, the funds raised on short term basis have been prima facie, not been used for long term investments.

18. According to the information and explanations given to us, the Company has made preferential allotment of shares to a company covered in the Register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

19. The Company has not issued any Debentures during the year.

20. The Company has not raised any money by way of public issues during the year or in the recent past.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing standards in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

Name of the Statute

Natureof Dues

Forum where the dispute is pending

Financial Year

Amount in Million (`)

The Income Tax Act, 1961

Income-tax C.I.T. (Appeals) 2002-03 to2004-05

102.62

Central Excise Act, 1944

Excise duty / Service tax

Customs, Excise and Service Tax Appellate Tribunal (CESTAT)

2008-09 and 2009-10

4.09

For LODHA & CO.Chartered AccountantsFirm Registration No: 301051E

A. M. HariharanPartnerMembership No. 38323

Place: MumbaistDate: 31 May 2013

stBALANCE SHEET AS AT 31 MARCH 2013

As at As at st31 March, 2013 st31 March, 2012

Note

( ` in million)

Particulars

Significant Accounting Policies and Accompanying notes forming integral part of the financial statements

AS PER OUR ATTACHED REPORT OF EVEN DATE

For LODHA & COMPANY For and on behalf of the Board of Directors Chartered Accountants

A.M.Hariharan Anand DuaMarc Lopresto Partner DirectorWholetime Director & CFO

Place: Mumbai Paresh DamaniastDated: 31 May 2013 Company Secretary

26

I EQUITY AND LIABILITIES

A. Shareholders’ funds(a) Share capital 2 1,447.3 1,226.6 (b) Reserves and surplus 3 (427.7) (474.5)

Sub Total (A) 1,019.5 752.1

B. Share application money, Pending allotment 4 - 177.0 Sub Total (B) - 177.0

C. Non-current liabilities(a) Long-term borrowings 5 1,036.1 1,018.0

Sub Total (C) 1,036.1 1,018.0

D. Current liabilities(a) Short-term borrowings 6 285.0 628.5 (b) Trade payables 7 51.0 96.0 (c) Other current liabilities 8 504.8 383.0 (d) Short-term provisions 9 12.9 13.5

Sub Total (D) 853.7 1,121.0 TOTAL (A+B+C+D) 2,909.3 3,068.1

II ASSETS

E. Non-current assets(a) Fixed assets

(i) Tangible assets 10 2,455.8 2,329.5 (ii) Intangible assets 10 8.5 11.2 (iii) Assets held for Disposal 25.2 -(iv) Capital work-in-progress 10 12.6 69.8

2,502.0 2,410.5 (b) Deferred Tax Assets (Net) 11 - 96.6 (c) Long-term loans and advances 12 3.0 6.3 (d) Other non-current assets 13 3.2 2.4

Sub Total (E) 2,508.2 2,515.8

F. Current assets(a) Inventories 14 190.1 253.3 (b) Trade receivables 15 15.2 88.9 (c) Cash and bank balances 16 49.9 50.2 (d) Short-term loans and advances 17 144.5 155.0 (e) Other current assets 18 1.4 4.9

Sub Total (F) 401.1 552.3

TOTAL (E+F) 2,909.3 3,068.1

1-37


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED st

31 MARCH 2013

For the year ended st31 March, 2013


Note

( ` in million)

Particulars

27

1 Revenue from operations (gross) 19 826.8 1,959.1 Less :- Excise Duty 88.5 156.8

738.3 1,802.2 2 Other income 20 4.2 8.6

3 Total Revenue (1+2) 742.4 1,810.8

4 Expenses(a) Cost of materials consumed 21 731.2 1,559.8 (b) Power & Fuel 22 157.5 225.7 (c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade 23 13.7 (2.0)(d) Employee benefits expense 24 88.7 133.4 (e) Finance costs 25 108.2 138.8 (f) Depreciation and amortisation expense - 136.7 131.7 (g) Selling & Distribution expenses 26 12.2 29.9 (h) Other expenses 27 63.0 69.8 (i) Net Loss on currency fluctuation and translation - 3.3 29.2

Total Expenses 1,314.4 2,316.3

5 Profit / (Loss) before exceptional items and tax (3 - 4) (572.0) (505.5)

6 Exceptional items Income/(Expenses) (Refer Note 28) (13.0) 7.5

7 Profit / (Loss) before tax (5+6) (585.0) (498.0)

8 Tax Expenses:(a) Current tax - - (b) Deferred tax Assets reversed 96.6 -

9 Profit / (Loss) For the Year (7 - 8) (681.6) (498.0)

10 Earnings per share of face value of ` 10 each -

(a) Basic & Diluted Earnings Per Share (Before Exceptional Items) in ` (5.45) (4.12)

(b) Basic & Diluted Earnings Per Share (After Exceptional Items) in ` (5.56) (4.06)

Significant Accounting Policies and Accompanying notes forming integral part of the financial statements 1-37





CASH FLOW STATEMENT FOR THE YEAR ENDED st31 MARCH 2013



( ` in million)

Particulars

Notes:1 Cash flow statement has been prepared under the indirect method as set out in Accounting Standard-3 "Cash Flow Statement" prescribed

by Companies (Accounting Standards) Rules,2006.2 Figures in brackets indicate cash outflow.3 Previous year's figures have been re-grouped / re-arranged, wherever necessary, to conform to current year's classification.

28

Significant Accounting Policies and Accompanying notes forming integral part of the financial statements :Refer Notes 1 to 37





A. CASH FLOW FROM OPERATING ACTIVITIES :Net Profit/(Loss) before tax and exceptional items (572.0) (505.5)Adjustments for : Depreciation 136.7 131.6 Interest 108.2 138.8 Provision for Doubtful Debts 3.4 0.4 Exchange Gain or Loss on Asset and Liabilities. 3.3 5.4 Provision no longer required written back (0.4) (4.9)

Operating Profit before Working Capital Changes (320.8) (234.2)Adjustments for : Trade receivables and other Current Assets 81.7 (6.0) Inventories 63.2 26.9 Trade Payables and other Current Liabilities (33.9) (56.5)

Cash generated from Operations (209.9) (269.8) Direct Taxes paid (0.4) (0.3)Cash generated from Operations before exceptional items (210.2) (270.1)Exceptional Income - 7.5 Net Cash generated from Operating Activities (Total A) (210.2) (262.6)

B. CASH FLOW FROM INVESTING ACTIVITIES :Purchase of fixed assets (including CWIP) (215.9) (71.4)Proceeds from sale of fixed assets - - Net Cash generated from Investing Activities ( Total B) (215.9) (71.4)

C. CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Borrowings 100.0 246.1 Repayment of Borrowings (343.5) (21.4) Repayment of Sales Tax Loan - (0.8) Interest paid (108.2) (64.8) Share application Money received. 772.0 177.0 Net Cash generated from Financing Activities (Total C) 420.3 336.1

D. NET INCREASE/DECREASE IN CASH EQUIVALENTS : (TOTAL A+B+C) (5.9) 2.1

Opening Cash and Cash Equivalents 10.0 7.9 Closing Cash and Cash Equivalents 4.1 10.0


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED st

31 MARCH 2013 ` in millions except as otherwise stated

29

NOTE '1'

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR stENDED 31 MARCH 2013

Overview

Incorporated in the state of Maharashtra in 1981, the Company was originally named Maskara Polytex Private Ltd. In 1994, it was converted into a public limited company. In July 1995, the name of the company was changed to Maskara

thIndustries Ltd. Subsequently, on 25 June 2001 the name was again changed to Polygenta Technologies Limited. The Company manufactures environmentally beneficial, sustainable Polyester Filament Yarn (PFY) using recycled PET bottle feedstock, manufacturing primarily Drawn Texturised Yarn.

SIGNIFICANT ACCOUNTING POLICIES:

a) Basis of Accounting:

i) The financial statements are prepared under historical cost convention, on a going concern basis and in accordance with the applicable Accounting Standard as specified in the Companies (AccountingStandards) Rules, 2006 (“the Rules”) and the relevant provisions of the Companies Act, 1956, to the extent applicable.

ii) All expenses and income to the extent ascertainable with reasonable certainty are accounted for an accrual basis.

iii) All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the revised schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current-noncurrent classification of assets and liabilities.

b) Use of Estimates:

The preparation of financial statements is in conformity with Generally Accepted Accounting Principles (GAAP), which requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements, and reported amounts of revenue and expenses for that year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively.

c) Revenue Recognition:

i) Sales revenue is recognised on transfer of significant risks and rewards of ownership of the goods to the buyer, which is generally on despatch of goods /Bill of lading. Sales are inclusive of Excise Duty and are net of trade discounts and sales tax.

ii) Export incentives under the various schemes are accounted for in the year of export.

iii) Revenues from the sale of consultancy projects are recognised as and when the advisory commitments are rendered as per the terms of the contract.

iv) Interest income is recognised on a time proportion basis.



30

d) Fixed Assets:

Tangible Assets:

i) Fixed Assets are stated at cost less accumulated depreciation and impairment losses. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

ii) Cost of acquisition comprises all costs incurred to bring the assets to their location and working condition up to the date the assets are put to use. The cost of construction is composed of those constituent assets that relate directly to completion of specific fixed assets and those that are attributable to the construction activity in general and can be allocated to specific fixed assets up to the date such fixed assets are put to use.

Intangible Assets:

The Company capitalises software where it is reasonably estimated that the software has an enduring useful life.

e) Capital Work in Progress:

Capital work in progress represents all costs directly attributable and incurred for setting up new manufacturing and/or modifying existing manufacturing facility including pre-operative expenses for trial run and borrowing costs incurred prior to the date of commencement of commercial production.

Expenditure attributable to construction of fixed assets are identified and allocated on a systematic basis to the cost of the related asset.

Any other expenditure which is not directly or indirectly attributable to the construction of the Project / construction of the fixed asset is charged off to profit and loss account in the period in which they are incurred.

f) Depreciation / Amortisation :

i) Leasehold land premium is amortised over the period of lease.

ii) Depreciation is provided on Straight Line Method at the rates and in the manner as specified in Schedule XIV to the Companies Act, 1956.

iii) “Continuous process plant”, as defined in Schedule XIV, has been considered on a technical assessment and depreciation provided accordingly.

iv) The capital expenditure incurred on any leasehold premise are amortised over the period of its lease.

g) Impairment of Assets:

In accordance with Accounting Standard AS28 on 'Impairment of Assets' issued and prescribed by Companies (Accounting Standards) Rules, 2006, where there is an indication of impairment of the Company's assets related to cash generating units, the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of such assets exceeds its recoverable amount. An impairment loss is recognised in the profit and loss account.

h) Lease:

i) Assets acquired under lease, in which the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair




31

value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability. Any leasehold land premium is amortised over the period of lease.

ii) Assets acquired under lease wherein a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit & Loss account on an accrual basis.

i) Inventories:

i) Inventory of Finished Goods and Semi finished goods are valued at lower of cost and estimated net realisable value. Cost of finished goods and Work-in-process include conversion and other cost incurred in bringing the inventories to their present location and condition. Cost of raw material, consumable and stores & spares and packing materials is computed on weighted average basis.

ii) Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Obsolete, defective and unserviceable stocks are duly provided for.

j) Foreign Currency Transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

All monetary assets and liabilities in foreign currency are restated at the end of accounting period. With respect to long-term foreign currency monetary items, from April 1, 2011 onwards, the Company has adopted the following policy:

• Foreign exchange difference on account of a depreciable asset is adjusted in the cost of the depreciable asset, which would be depreciated over the balance life of the asset.

• In other cases such differences are accumulated in a “Foreign currency monetary item translation difference account” and amortised to Statement of Profit & loss over the balance life of the long term monetary item, up to 31.03.2020

In respect of forward exchange contracts, the difference between the forward rate and the exchange rate at the inception of the contract is recognised as income or expense over the period of the contract. Gains or losses on cancellation/settlement of forward exchange contracts are recognised as income or expenses. All other exchange differences are dealt with in the Statement of Profit & Loss.

k) Employee Benefits:

Liabilities in respect of employee benefits are dealt with as under:

i) The Company has a defined contribution plan for a Provident Fund at a percentage of salary / wages for eligible employees and the Company's contributions thereto are charged to the Profit & Loss Account.

ii) Gratuity: A contribution is made to the Trust administered by the Trustees and managed by ICICI Prudential for an amount actuarially valued at fiscal year-end.

iii) The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of un-utilised leave balance is provided based on an actuarial valuation carried out by an independent



32

actuary at the fiscal year-end and charged to the Profit & Loss account.

l) Borrowing Costs:

General and specific Borrowing Costs (including exchange differences) directly attributable to the acquisition, construction and production of a qualifying asset are capitalised as part of the cost of such asset up to date when such asset is ready for its intended use. Other borrowing costs are charged to the profit & loss account.

m) Taxation:

i) Income tax expense comprises current tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

ii) Provision for income tax is made on the basis of estimated taxable income for the current accounting period in accordance with the Income Tax Act, 1961.

iii) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.

iv) Deferred tax assets are recognised only to the extent that there is virtual certainty that the assets can be realised in future. However, where there is un-absorbed depreciation or a carry-forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or up to reflect the amount that is reasonably / virtually certain to be realised.

v) Tax credit is recognised in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JAA of the Income Tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within the statutory time frame and is reviewed at each balance sheet date.

n) Provisions, Contingent Liabilities and Contingent Assets:

i) Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amount of the obligation.

ii) Contingent liabilities are disclosed by way of note to financial statements after careful evaluation by the management of the facts and legal aspects of the matter involved.

iii) Contingent Assets are neither recognised nor disclosed in the financial statements.


2 SHARE CAPITAL

Particulars 31-Mar-13 31-Mar-12

Authorized

Equity shares, of `10 each 125,000,000 (Previous Year 125,000,000) equity shares of `10 each 1,250.0 1,250.0

Preference shares, of `10 each 30,000,000 (Previous Year 30,000,000) preference shares of `10 each 300.0 300.0

Issued, Subscribed and Paid-Up 122,655,765 (Previous Year 122,655,765) equity shares of `10 each fully paid-up 1,226.6

1,226.6

No. of shares % No. of shares %


31 MARCH 2013

31-Mar-13 31-Mar-12

` in millions except as otherwise stated

As at

Details of Share holding

a) Shares held by Holding company and ultimate holding company and its associates

c) Terms & Rights attached to equity shares

i) Equity shares having a par value of 10, Each holder of equity shares is entitled to one vote per share.

ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amount in proportion to their shareholding.

33

Nil 22,069,886 (Previous Year Nil ) Compulsory Convertible Preference Shares of `10 each fully paid-up 220.7 -

Total of Share Capital 1,447.3 1,226.6

Equity Shares:PerPETual Global Technologies Limited 64,107,864 52.27% 64,107,864 52.27%Aloe Environment Fund II 19,363,636 15.79% 19,363,636 15.79%Green Investment Asia Sustainability Fund I 7,636,364 6.23% 7,636,364 6.23%The Trustees, Polygenta Stock Option Trust 8,025,000 6.54% 7,425,000 6.05%

Compulsory Convertible Preference Shares:PerPETual Global Technologies Limited 22,069,886 100.00% - -

No. of shares % No. of shares %

31-Mar-13 31-Mar-12b) Details of Share holding more than 5%

Equity Shares:PerPETual Global Technologies Limited 64,107,864 52.27% 64,107,864 52.27%Aloe Environment Fund II 19,363,636 15.79% 19,363,636 15.79%Green Investment Asia Sustainability Fund I 7,636,364 6.23% 7,636,364 6.23%Less RPET Ltd. 13,649,983 11.13% 13,649,983 11.13%The Trustees, Polygenta Stock Option Trust 8,025,000 6.54% 7,425,000 6.05%

Compulsory Convertible Preference Shares:PerPETual Global Technologies Limited 22,069,886 100.00% - -

Particulars31-Mar-13 31-Mar-12

As at

3 RESERVES AND SURPLUS

Securities premium account:Balance at the beginning of the year 25.7 25.7 Add:Premium on issue of CCPS 728.3 - Balance at the year end 754.0 25.7

Surplus Profit/ (Loss):Balance at the beginning of the year (500.2) (2.2)Add: Net profit/(loss) for the year. (681.6) (498.0)Balance at the year end (1,181.8) (500.2)

Total of Reserves and surplus (427.7) (474.5)



34

Particulars

No. of shares No. of shares ` in Millions

` in Millions

Number of shares at the beginning 122,655,765 1,226.6

- - Number of shares at the end 122,655,765 1,226.6

31-Mar-13

Add: Share issued during the year

d) The reconciliation of the number of Equity shares outstanding and the amount of share capital is set out below:

31-Mar-12

Terms & Rights attached to Compulsory Convertible Preference Shares (CCPS)

I) CCPS shall be convertible into the Equity Shares in the ratio of 1 :1 within 18 months from the date of rdallotment i.e. 3 July, 2012 at the price 43/- per share.

ii) The resultant Equity shares shall be subject to lock-in for a period of three years from date of allotment of CCPS.

122,655,765

-122,655,765

1,226.6

-1,226.6

Particulars

No. of shares No. of shares ` in Millions

` in Millions

Number of shares at the beginning -

Number of shares at the end 22,069,886 220.7

31-Mar-13

Add: Share issued during the year

The reconciliation of the number of Preference shares outstanding and the amount of share capital is set out below:

31-Mar-12

- - -

22,069,886

220.7 - -

- -

e) The company has neither allotted shares pursuant to a contract without receiving cash, by way of bonus shares nor it has bought back shares during the immediately preceding five years from the date of balance sheet.

Share Application money, pending allotment 177.0-


As at

4 SHARE APPLICATION MONEY, PENDING ALLOTMENT




35

5.1. Terms of Repayment of Loan

Interest Rate0- 1 years 1-3 years > 3 years

Type of the Loan

As rescheduled, the External Commercial Borrowings is repayable at variable intervals commencing from th th15 January 2014 and ending at 15 January 2017.

Secured Loan - External Commercial borrowings

Terms of Repayment 2012-13

Euribor+ 5% 52.2 782.4 208.7

991.1 1,018.0

1,036.1 1,018.0


As at

5 LONG TERM BORROWINGS

Secured Borrowings

Total Long Term Borrowings

External Commercial Borrowings45.0 - Ratnakar Bank Term Loan

Secured Loan - Ratnakar Bank Term Loan

14.75% 55.0 45.0 -

Interest Rate0- 1 years 1-3 years > 3 years

Type of the Loan

Secured Loan - External Commercial borrowings

Terms of Repayment 2011-12

Euribor+ 5% Nil 407.2 610.6

5.2. Details of Security.

External Commercial Borrowings:

The said loan is secured by first pari passu charge by way of mortgage of land, buildings and tenements and immovable Plant & Machinery, both present and future at the Company's works at Nashik, and first pari passu charge by way of hypothecation of the whole of the inventories and other movable assets of the Company including its movable Plant & Machinery, spares, tools and accessories both present and future.

Ratnakar Bank Term Loan

The said loan is secured by all present and future movable fixed assets of the borrower of the following description lying or stored in the borrower's factories, premises or godowns or any other place, particularly plant and machinery, equipments, furniture and fixtures equipments, computer, vehicles whether installed on the factory shed or not and all present and future plant and machinery purchased from time to time by availing of the facility of term Loan of 10 Crores ( together with all the accessories, spares, tools etc.)`



36

104.0 -

181.0

- 285.0

-

-

285.0

I. Secured Short Term Borrowings

From Banks (Repayable on demand)

11.75% Project Loan from Standard Chartered Bank 11.75% Working capital Loan from Standard Chartered Bank

14.75% Working Capital loan from Ratnakar Bank Ltd

3.5% to 4% Buyer's Credit from Standard Chartered Bank

Total Short Term Secured Borrowings

II. Unsecured Short Term Borrowings

Interest free loan From Director

Total Short Term Unsecured Borrowings

Total Short Term Borrowings (I+II)

a) Loan/Advance from Related Parties


As at

6 SHORT TERM BORROWINGS

Additional information to Secured Short Term Borrowings:

I. Project loan & Working Capital loan and Buyers Credit from Standard Chartered Bank The said loan is secured by second pari passu charge by way of mortgage of land, buildings and tenements and immovable Plant & Machinery, both present and future at the Company's works at Nashik and second pari passu charge by way of hypothecation of the whole of the inventories and other movable assets of the Company including its movable Plant & Machinery, spares, tools and accessories both present and future.

II. Working Capital Loan from Ratnakar Bank LtdThe said loan is secured by first pari passu charge by way of mortgage of land, buildings and tenements and immovable Plant & Machinery, both present and future at the Company's works at Nashik and first pari passu charge by way of hypothecation of the whole of the inventories and other movable assets of the Company including its movable Plant & Machinery, spares, tools and accessories both present and future.

289.0 80.1

181.7

72.7 623.5

5.0

5.0

628.5

Due to Small & Micro Enterprises (Refer Note no. 30) 0.7

Other than Small & Micro Enterprises 95.3

Total of Trade Payables 96.0


As at

7 TRADE PAYABLES

-

51.0

51.0




37


As at

8 OTHER CURRENT LIABILITIES

Current portion of the Ratnakar Bank Term Loan 55.0 - Current portion of the External Commercial Borrowings 52.2 - Interest Accrued but not Due on Long Term Borrowings: 194.1 144.0 Share Application Money Refundable 178.9 -Advance From Customers: Holding Company - 213.6 Others 0.1 9.5 Creditors for Fixed Assets 15.8 4.5 Withholding and other taxes payable 8.6 11.5 Total Other Current Liabilities 504.8 383.0

1.5

3.6

7.7

0.0 12.9

Provision for employee benefits Gratuity

Leave EntitlementProvision for Income taxes

Wealth taxesTotal of Other Short Term Provisions


As at

9 SHORT-TERM PROVISIONS

2.2

3.5

7.2

0.1 13.5

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0.0

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0.6 691.7

291.5

291.5 400.0

-

(Unsecured and considered good)

Capital Advance 1.5

Deposits with Service & Material suppliers 1.5

Total of Long Term loans & Advances 3.0

Interest Accrued on Fixed Deposit 3.2

Total of Other Non Current Assets 3.2

Raw Materials 10.1

Work-in-Progress 70.7

Finished Goods 54.6

Packing Materials 3.0 Consumables and Stores & Spares 51.6

Total of Inventories 190.1


As at

11 DEFERRED TAX ASSETS (NET)

Deferred tax assets:

Expenses allowed on payment basis

Accumulated Tax losses and unabsorbed depreciation

Provision for Doubtful Debts

Deferred tax liabilities:

Depreciation on Fixed Asset

Less: Assets not recognised as a matter of prudence

Net Deferred Tax Assets


As at

12 LONG TERM LOANS & ADVANCES


As at

13 OTHER NON-CURRENT ASSETS


As at

14 INVENTORIES

39

1.2

503.9

0.1 505.2

263.7

263.7 144.9

96.6

4.9

1.4

6.3

2.4

2.4

57.4

67.3

71.7

4.7 52.1

253.3



40

0.1

4.1

45.7

49.9



As at

17 SHORT-TERM LOANS AND ADVANCES

- Cash & Cash Equivalents

- Cash on hand

- Balances with banks-In current Accounts - Other Bank Balances

- Deposits with Banks- held as margin money with maturity more than 12 months

Total of Cash & Bank balances


As at

18 OTHER CURRENT ASSETS

5.1

3.6 8.6

10.1

3.6 15.2


As at

15 TRADE RECEIVABLES

16 CASH AND BANK BALANCES

Unsecured, considered good unless otherwise stated

- Debts outstanding for a period exceeding six months

- Considered Good

- Considered doubtful

- Other debts

Less: Provision for doubtful debtsTotal of Trade Receivable

As at

0.1

9.9

40.1

50.2

1.2

0.4 1.5

87.8

(0.4) 88.9

18.7 87.8

Unsecured, considered goodExcise Refund Receivable 0.2 15.5 Staff Loans & Advances 0.3 0.8 Income Tax Refund receivable 0.7 0.5 Prepaid Expenses 1.5 0.9 Advances to suppliers 3.3 16.4 VAT Refund receivable 20.5 7.2 Input credit receivable- Excise and Service Tax 118.0 113.7 Total of short term Loans & Advances 144.5 155.0

Export Incentive Receivable 1.4 4.9 Other Current Assets 0.0 - Total of Other current assets 1.4 4.9




41

Liabilities / Provision no longer required written back 0.4

Interest on Fixed Deposit 3.5

Miscellaneous Income 0.2

Total of other income 4.2


For the year ended

19 REVENUES FROM OPERATIONS


For the year ended

20 OTHER INCOME

a) Sale of Products Draw Texturised Yarn 572.1 1,132.4 Partially Oriented Yarn 95.4 231.7 PET Chips 15.1 154.1 PET Flakes - 0.8 Oligomer 1.6 1.3 PTA - Traded 23.2 17.1 By-Products 24.2 23.5

Excise duty recovered 87.7 156.3 Less:-Discount Allowed (4.6) (12.2)Total Sales of the Products (Gross) 814.7 1,705.0

b) Sale of Services:- Export - 238.1 c) Other operating income:- Export Incentives 9.1 11.8 Scrap Sales 3.0 4.1 Total of Revenues from operations 826.8 1,959.1

4.9

2.8

0.9

8.6

Consumption of Raw Material 638.5 1,395.2 Consumption of Packing Material 29.6 61.5 Consumption of Consumables & Spares 29.6 68.5 Purchase of PTA Traded 22.6 17.1 Freight Inward 11.0 17.6 Total Cost of Goods Sold 731.2 1,559.8


For the year ended

21 COST OF GOODS SOLD

Power Cost 118.0

Fuel Cost 39.5 Total of Power & Fuel Cost 157.5


For the year ended

22 POWER & FUEL COST

167.2

58.5 225.7



42

Salaries, Wages and bonus 81.4 Contribution to provident and other funds 5.0

Staff Welfare Expenses 2.2

Total of Employee benefit Expenses 88.7

Commission to Sales Agents 8.7 Freight and Octroi 3.6

Total of Selling & Distribution Expenses 12.2


For the year ended

24 EMPLOYEES BENEFIT EXPENSES


For the year ended

26 SELLING & DISTRIBUTION EXPENSES

54.6

70.7

71.7 67.3

(13.7)


For the year ended

23 CHANGE IN THE INVENTORIES OF FINISHED GOODS AND WORK IN PROGRESS

Closing Stocks

Finished goods

Work-in-ProgressLess:- Opening Stocks

Finished goods Work-in-Progress

Total change in the Inventories of finished goods and work in progress

71.7

67.3

63.2 73.8

2.0

126.45.2

1.8

133.4

20.9 9.0

29.9

Interest on Term Loan(ECB) 67.3

Interest on working capital Loan 37.3

Other borrowing costs 3.6

Total of Finance Costs 108.2


For the year ended

25 FINANCE COSTS

68.2

56.6

14.0

138.8




43


For the year ended

27 OTHER EXPENSES

Repairs and Maintenance:

Building 0.2 1.2

Plant and Machinery 3.4 2.5

Others 0.6 1.5

Machine Hire Charges 2.9 6.2

Insurance 1.6 1.9

Rent 2.8 2.9

Rates & Taxes 4.8 3.7

Auditors' Remuneration:

Audit Fees 0.5 0.5

Tax Audit Fees 0.1 0.1

Certification Fees 0.4 0.3

Out of pocket expenses / taxes 0.0 0.1

Legal & Professional fees 11.0 14.0

Provision for Bad Debts 3.4 0.4

Travelling and Conveyance 9.2 14.6

Vehicle Expenses 6.8 4.9

Security Service Charges 3.0 3.4

Computer/ IT Expenses 1.9 2.1

Telephone Expenses 1.3 1.4

Miscellaneous Expenses 9.4 8.3

Total of other Expenses 63.0 69.8


As at

Sr.No.

a) Principal amount remaining unpaid 0.0 0.7 b) Interest paid in terms of Section 16 - - c) Interest due and payable for the period of delay in payment - -

d) Interest accrued and remaining unpaid - e) Interest due and payable even in succeeding years

- -

-


As at

Estimated amount of claims against the company not acknowledged as debt in respect of: (Including interest up to date of demand, where applicable)

- Disputed Excise/Service Tax Demand - Vendor Claims - Disputed Income Tax Demand for earlier years

4.30.9

102.6

(` in Millions)

4.40.9

-



44

st28) a) Exceptional expenses of 13.0 million for the year ended 31 March 2013 resulted from the revaluation of one of its plant & building which is transferred to Assets held for disposal /lease and stated at recoverable value.

b) Previous Year - Exceptional income of ` 7.5 million resulted from the sale of its Murbad Unit which was under closure since January 2000.

29) Contingent liabilities and commitments

a) Contingent Liabilities:

b) Commitments:

i. Estimated amounts of contracts remaining to be executed on capital account and not provided for (Net of Advances) is 16.6 million (previous year 11.1 million)

ii. The Company has an outstanding export obligation of Nil* (Previous Year 264 million) as at the close of period, against the import licenses taken for import of capital goods under Export Promotion Capital Goods (EPCG) Scheme. With respect to its EPCG export obligation, the Company had also provided bank guarantees to Custom Authorities ` 15.3 million (Previous year `15.9 million) backed by a fixed deposits which are under process of release.

* Export Obligation fulfilled during the year includes fulfilment from exports of service of previous year earlier not considered.

30) Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

The above information has been compiled in respect of parties to the extent to which it could be identified as Micro, Small, and Medium Enterprises. The disclosure is based on the information made available to the Company regarding the status of suppliers in relation to the “Micro, Small, and Medium Enterprise Development Act, 2006”.

OTHER NOTES

(` in Millions)




45

31) Related Party Transactions as per Accounting Standard –18:

Related parties where control exists.PerPETual Technologies Ltd. (Promoter, Holding Company)Aloe Environment Fund II (Promoter)Green Investment Asia Sustainability Fund I (Promoter)

Parties with whom transactions have been entered into during the year:

Associates & Fellow SubsidiariesAlpha Bottle Ltd. (Fellow Subsidiary)

Key Management PersonnelMr. Subodh Maskara –Chairman Mr. Marc Lopresto – Wholetime director and CFOMr. Gerard De Nazelle – Chief Executive Officer

Enterprises where key managerial persons/directors, their relatives have significant influenceMaskara Filaments Private LimitedS. K. Maskara & Sons (HUF)

Details of transactions entered into during the year

Nature of Transaction

Related party where control

exists

Key Management Personnel and enterprises

where key managerial personas having

significant influence

Total

Sale of Consultancy Projects - PerPETual Global Technologies Limited

(Formerly known as AlphaPET Ltd)

- AlphaBottle Ltd

Advance for Purchase of Material

Remuneration Paid

- Marc Lopresto

- Gerard De Nazelle

-

(179.9)

-(179.9)

-(-)

-

(58.3)

-(58.3)

-

- AlphaBottle Ltd

0.5(-) 0.5

(-)

-

(-)

2.2(2.1)

2.2(2.1)

-

(-)

3.9(3.8)

3.9(3.8)

Reimbursement of Expenses-Received - PerPETual Global Technologies Limited (Formerly known as AlphaPET Ltd

-

(0.5)

-(0.5)

-

(` in millions)

(-)

-(-)

(-)



46

Notes:

1. Previous year's figures are given in brackets.

2. Neither amount in respect of related parties have been written off/written back during the year, nor has any provision been made for doubtful debts / receivables.

3. Related party relationships are as identified by the management and relied upon by the auditors.

4. Figures in 0.00 represents amount less than 50,000

5. During the financial year 2012-13 the Company has allotted 22,069,886 Compulsory Convertible Preference Share (CCPS) of 10/- each at a premium of 33/- per CCPS to PerPETual Global Technologies Limited.

Nature of Transaction

Related party where control

exists

Key Management Personnel and enterprises

where key managerial personas having

significant influence

Total

Reimbursement of Expenses-Paid

Maskara Filaments Private Limited

0.1

(0.2)

0.1(0.2)

-

S K Maskara & Sons ( HUF )

-

(0.0)

-(0.0)

-

Loan Repayment - to Marc Lopresto

(-)(-)

(-)(4.7)

-(4.7)

Loan Received - from Marc Lopresto

(-)(-)

-(5.0)

-(5.0)

Advance Received - PerPETual Global Technologies Limited (Formerly known as AlphaPET Ltd.)

-

(213.6)

-(213.6)

-(-)

Advance Repaid - PerPETual Global Technologies Limited (Formerly known as AlphaPET Ltd.)

217.2

(-)

217.2(-)

-(-)

Closing Balances:

Remuneration payable- Gerard De Nazelle- Marc Lopresto

0.30.2

0.30.2

Advance for Purchase of Material- Alpha Bottle Ltd 0.60.6

Share Application Money Received - PerPETual Global Technologies Limited

872.6

(177.0)

-

872.6(177.0)(-)

Share Application Money received - PerPETual Global Technologies Limited 100.6 - 100.6

-

(-)

-

(-)

(-)


Net Profit/(Loss) – Before Exceptional items

Net Profit/(Loss) – After Exceptional items Weighted Average No. of Equity Shares

Nominal Value of Shares ( ) Basic & Diluted Earnings per share – Before Exceptional items

Basic & Diluted Earnings per share – After Exceptional items

2012-13 2011-12Particulars

(668.6)

(681.6) 122.655,765

10(5.45)(5.56)

(505.5)

(498.0) 122.655,765

10(4.12)(4.06)



47

32) Foreign Exchange currency exposures not covered by derivatives instruments:

33) (a) In the opinion of the Board, all the assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.

(b) The accounts of certain Trade Payables, Trade Receivables and Advances are subject to formal confirmations/reconciliations and adjustments, if any. The management does not expect any material difference affecting the current year's financial statements.

34) Basic and Diluted Earnings per Share as per AS- 20 is computed as under:

35) Employee Benefit Plans:

The disclosures in accordance with the requirements of the Accounting Standards are provided below:-

1. Defined Contribution Plan:

The Company has recognised ` 4.9 million (Previous year ` 5.1 million) as an expense towards its post-employment defined contribution plan comprising of a provident fund, deposited with government authorities.

Particulars stAs at 31 March 2013

Trade Receivable Advance

from Customers

Loan

Bank Account Interest

payable loan Trade

Payable

Advance to vendors

Currency

Type

USD

EURO USD

Euro USD Euro

Euro

USD Euro

EUR JPY USD

In Foreign Currency

In Indian Rupees

In Foreign Currency

In Indian Rupees

stAs at 31 March 2012

0.0

--

15.0-

-

2.8

0.00.0

0.0-

0.0

2.3

--

1043.3-

-

194.1

0.00.1

0.5-

0.0

0.2

1.91.1

15.0

1.4

0.0

2.1

0.10.0

0.00.1

0.0

9.0

128.953.5

1,018.0

72.7

0.6

144.0

5.40.0

0.60.0

0.0

(` in millions)

(` in millions)

2012-13 Particulars 2011-12

I Reconciliation of Opening and closing balances of Defined benefit Obligation - Defined Benefit obligation at beginning of the year - Current Service Cost 1.3 1.4 - Past Service Cost - - - Interest Cost 0.4 0.3 - Actuarial (Gain)/Loss (0.2) 1.6 - Benefit paid (0.6) (2.2) - Liability Transfer out - - Defined Benefit obligation at year end 5.4 4.5

II Reconciliation of Opening and Closing balances of fair value of plan assets - Fair Value of plan asset at beginning of the year 2.2 2.3

- Expected return on plan assets 0.2 0.2- Actuarial Gain/(Loss) 0.0 0.2- Employer Contribution 2.0 -- Benefits Paid (0.6) (2.2)- Liability Transfer out - -

- Fair Value of plan asset at year end 3.8 2.3Actual return on plan assets 0.2 2.2

III Expenses Recognised in Profit & loss account - Current Service Cost 1.3 1.3 - Past Service Cost - - - Interest Cost 0.4 0.3

- Expected return on plan assets (0.2) (0.2)- Actuarial Gain & Loss (0.2) (0.3)Expenses Recognised in Profit & loss account 1.3 1.1

IV Amount Recognised in the Balance Sheet - Defined benefit obligation as at end of the year 5.4 4.5 - Fair Value of plan assets at the end of the year 3.8 2.3

Net Liability / (Assets) 1.6 2.2

V Actual Return on plan Assets 0.1 2.2- Expected return on plan assets 0.1 0.2Actuarial gain/ (loss) on plan assets 0.0 2.0

VI Principal actuarial assumptions - Discount rate 8.25% 8.75% - Expected rate of return on plan assets 8.70% 8.00% - Salary increment rate 6.00% 6.00%

VII Composition of plan assets - Central Government Securities 0% 0% - State Government Securities 0% 0% - Approved marketable securities 0% 0% - Bonds/Debentures etc 0% 0% - Insurer Managed Funds 100% 100%

4.5 3.4



48

2. Defined Benefit Plan:

In accordance with Payment of Gratuity Act, 1972, the Company is required to provide post-employment benefits to its employee in the form of gratuities. The Company is contributing to the trust, administered by the Trustees and managed by ICICI Prudential, an amount actuarially valued at the year-end. In accordance with Accounting Standards, the disclosure relating to the Company's gratuity plan is given below.

(` in millions)

Note:stThe liability recognised with respect to leave encashment/entitlement in the balance sheet as on 31 March

2013 is 3.6 million (previous year 3.5 million).


Travelling and other expenses 1.9 Interest 15.2 Commission 0.0 Technical & Professional Fees 0.5

Particulars

(` in millions)

2012-13 2011-120.9

69.7 0.4 0.4

36) Additional disclosures.

(a) Particulars in respect of Sales

(b) Raw Materials consumed:

(c) Value of Raw Material consumed:

(d) Expenditure in Foreign Currency:

Particulars 2012-13 2011-12

in million in million

Mono Ethylene Glycol (MEG) 165.4 374.5Recovered Ethylene Glycol (REG) 9.2Purified Terephthalic Acid (PTA) 289.0 924.3Partially Oriented Yarn - 8.0PET Bottles & Flakes 173.3 21.9PET Chips 1.6 0.4Total 638.5 1,329.1



49

PET Chips 15.1 154.1PET Flakes - 0.8Draw Texturised Yarn 567.5 1,120.2Partially Oriented Yarn 95.4 231.7Oligomer 1.6 1.3Sale of Scrap 24.2 23.5PTA Traded 23.2 17.1Excise Duty Recovered 87.7 156.3Total 814.7 1705.0

Particulars 2012-13 2011-12

in million in million

2012-13 2011-12

% Imported -

100.00%100.00%

157.51,171.61,329.1

11.70%88.30%

100.00%

Indigenous Total

Particulars

%-

638.5638.5

in million

in million

Capital Equipments Raw Materials Spares Consumables

4.2-

3.612.6

Particulars

(` in millions)

2012-13 2011-12

1.5 157.5

1.8 16.0

e) Earnings in Foreign Currency:

(f) CIF Value of Imports:

37) The previous year's figures have been re-grouped and/or re-arranged wherever necessary to conform to the current year's presentation.



50

Export of goods on FOB Basis 131.4 Consultancy Advisory -

Particulars

(` in millions)

2012-13 2011-12

154.5 238.1

SIGNATURES TO NOTES '1' TO '37'For and On behalf of the Board

Marc Lopresto Anand Dua Paresh Damania Wholetime Director & CFO Director Company Secretary

Place: Mumbai stDate: 31 May, 2013


POLYGENTA TECHNOLOGIES LTD.Regd. Office : B-302, Dipti Classic Premises, Suren Road, Andheri(E), Mumbai: 400093

Tele :022-61933333/61933309 • Fax :022-61933316 Email : [email protected] • website: www.polygenta.com

th5 September 2013

Dear Shareholder,

As you are aware the Ministry of Company Affairs has taken a “Green Initiative in the Corporate governance” by st allowing paperless compliances by the Company. MCA has issued a Circular on 21 April 2011 stating that service

of notice / documents by a company to its shareholders can now be made through electronic mode.

To support such noble initiative by MCA, your company proposes to send documents such as Notice of AGM, Audited Financial statements, Directors' Report, Auditors Report and all other statutory documents to the

stshareholders in Electronics form w.e.f 1 October 2011.

You are holding Company's share(s), but your email address is not available with us on records. Please let us know your email id by sending email to [email protected] and [email protected] and giving the following details. You can also courier/fax the information at the registered office of the company.

Name of the Shareholder : _________________________________________________________

Address of the Shareholder : _________________________________________________________

Registered Folio No. : _________________________________________________________

No. of Shares held : _________________________________________________________

Email Id : _________________________________________________________

In case you are holding the shares in Demat form, please provide/update your email address with your Depository Participant (DP) as the company shall pick up the data from DP for the purpose of emailing the documents.

Please note that as a valued shareholder you are always entitled to request and receive free of cost a printed copy of the annual report of the Company and all other documents.

We solicit your support in helping the Company to implement the e-governance initiative of the Government.

Thanking you,Yours faithfully,

Paresh DamaniaCompany secretary

POLYGENTA TECHNOLOGIES LIMITEDRegd. Office : B-302, Dipti Classic Premises, Suren Road, Andheri(E), Mumbai-400 093.

FORM OF PROXY

POLYGENTA TECHNOLOGIES LIMITED

Regd. Office : B-302, Dipti Classic Premises, Suren Road, Andheri(E), Mumbai-400 093.

ATTENDANCE SLIP

To be handed over at the entrance of the Meeting Hall.

Name of the attending Member(in Block Letters)

MembershipFolio Number

Number ofshares held

Name of Proxy (in Block Letters) (To be filled in, if the Proxy attends instead of the member)

Member’s / Proxy’s Signature(to be signed at the time of handing over this slip)

as my/our proxy to vote for me/us on my/our behalf at the ANNUAL GENERAL MEETING of the Company to be held at Residency Hotel, Suren Road, (Near Andheri-Kurla Road and W.E.Highway), ,

th30 September 2013 P.M and at any adjournment thereof.

st31 Andheri (E), Mumbai-400 093 on Monday

at 3.30

I/We

of

being a member(s) of the above named Company, hreby appoint

of

or failing him

of

Signed at

Member Folio No.

No. of Shares held

(place) this day of 2013

Affix 1/-

RevenueStamp

`

Important :(a) Revenue Stamp of One Rupee is to be affixed on this form.(b) The Form should be signed across the stamp as per specimen signature registered with the Company.(c) The Companies Act, 1956 lays down that an instrument appointing a proxy shall be deposited at the Registered

Office of the Company, not less that FORTY-EIGHT HOURS before the time fixed for holding the Meeting.(d) A proxy need not be a Member.

I hereby record my presence at the GENERAL MEETING of the shareholders of the

thCompany held on , 30 September 2013 P.M at Residency Hotel, Suren Road, (Near

Andheri-Kurla Road and W.E.Highway),

st31 ANNUAL

Monday at 3.30

Andheri (E), Mumbai-400 093

If undelivered, please return to :

Polygenta Technologies Limited

B-302, Dipti Classic Premises, Suren Road,

Andheri(E), Mumbai-400 093

To,

Documents

Polygenta Annual Report 2013 cc1 N O T I C E NOTICE is hereby given that the Thirty-First Annual General Meeting of Members of Polygenta Technologies Limited will be held on Monday,